❗Strategy "Sentimental news background"
Last updated
Last updated
Go to "Add Widget" and open the TradingView tab.
In the window with the chart, select the instrument and the trading timeframe.
Open "1ex Indicators" and select "News Sentiment."
Set the parameters (as shown in the image below).
IMPORTANT!!!
In the "Symbol" field, there are two options:
"Crypto" – the indicator will be built based on all cryptocurrency market news.
"BTC" – the indicator will be built based on the news specifically related to the selected instrument in the TradingView chart.
In the "Period" field, you can select the news timeframe. To get more accurate results, you should choose a period that is 20-60 times the timeframe of the chart's instrument. A smaller multiple means higher sensitivity, while a larger multiple means lower sensitivity.
Example: Chart TF = 5 min, Period = 4 hours (48 candles of 5 min).
You will get the following indicator window:
Line Values:
Green line - absolute number of positive news stories.
Red line - absolute number of negative news stories.
White line - absolute number of neutral news stories.
Trading strategy description!!!!!
Theory: The market typically experiences two states in relation to news: either the news is significant, or it has already been priced into the asset. Since the cryptocurrency market is generally characterized by a positive sentiment (as it is a dynamically developing segment), the analysis focuses on the news background with a positive sentiment. Of course, it is also important to pay attention to negative sentiment, as a significant surge in negative news can lead to a sharp decline in the asset's price. For the current trading strategy, the chart of positive sentiment is chosen.
On the sentiment chart, significant highs and lows of the indicator are identified (marked by points A, B, C, D, E, F, G, H, I, J in the image).
The rise in sentiment between segments AB, CD, EF, GH, IF highlights periods for the asset price chart labeled TP1, TP2, TP3, TP4, and TP5, respectively.
In the AB and CD segments, the price reacts with upward movement (shown by green arrows on the price chart) to the increase in positive sentiment. After the sentiment chart forms a peak, a LONG trade can be entered at points B and D (or traders can search for a LONG entry if using this indicator as a filter).
In segments EF, GH, and IJ, there is no significant price reaction to the increase in sentiment. The highs and lows of positive sentiment during these periods do not influence the price. During this interval, the asset's price either declines, remains approximately the same, or shows very minimal growth. After the sentiment chart forms a peak, a SHORT trade can be entered at points F, H, and J (or traders can search for a SHORT entry if using this indicator as a filter).
IMPORTANT! Price levels are compared directly (not the price reaction over time to the rise in positive sentiment, but specifically the price levels corresponding to the minimum and maximum sentiment values).
IMPORTANT! If the signal does not work (low probability), it means it has a delayed effect, and the price tends to return to this level within a short period. A trader can remember the price level where the signal didn’t work and account for a potential return to it over time.
Option №1:
Exit on the counter signal. The current position is closed when the first counter signal appears.
Trading result for this period over 7 days: +11.31%
Option №2:
A significant (IMPORTANT: achievable) price level, such as support or resistance, is selected. The trades are closed at this level!
Trading result for this period over 7 days: +6.36% PROS: Shorter holding time for positions and reduced risk of accidentally holding a trade too long.
CONCLUSIONS:
This strategy can be used either as a standalone method or as one of the filters within various trading strategies employed by traders.
IMPORTANT! Trading involves risks. The user is solely responsible for their actions or inactions when using the described trading strategy. The strategy and its description are for informational purposes only. The information provided here does not constitute personalized investment advice. News, articles, expert comments, research, forecasts, and other information are presented without considering any specific investment profile, and the financial instruments or operations mentioned may not align with the expected returns, investment horizon, or acceptable risk levels for any particular user. Company 1EX is not responsible for any potential losses resulting from trades based on the described strategy or investments in the financial instruments mentioned in this publication.
