📰Strategy "Trading against the news"
Last updated
Last updated
Setting up the workspace:
Go to "Add Widget" and open the TradingView tab.
In the chart window that appears, select the instrument and the trading timeframe.
Open "1ex Indicators" and choose "News Sentiment."
Adjust the settings (as shown in the photo below):
IMPORTANT!!!
In the "Symbol" field, there are two options:
"Crypto" – the indicator will be based on all cryptocurrency market news.
"BTC" – the indicator will focus only on news related to the specific instrument selected in the TradingView chart.
In the "Period" field, you can set the time period for the news data. For optimal results, choose a period that is 20 to 60 times longer than your trading timeframe on the chart. A lower multiplier results in higher sensitivity, while a higher multiplier results in lower sensitivity.
Example: If the chart's timeframe is 5 minutes, set the news period to 4 hours (which equals 48 candles of 5 minutes each).
The indicator window will look like this:
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: When extremely positive or extremely negative news hits the market, it's often best to trade in the opposite direction. This is based on the principle that "smart money" usually moves against the crowd. Market overreactions to news can create opportunities for savvy traders to capitalize on price corrections as the initial emotional response fades and market sentiment stabilizes.
Look for peaks in positive news (green line) on the sentiment indicator and compare the distance between the negative news (red line).
Analyze and receive trading signals:
Long Signal: When the red line (negative news) reaches the same level as the green line (positive news) or even surpasses it.
Short Signal: When the green line (positive news) is significantly above the red line (negative news).
IMPORTANT!
There are a few nuances to consider with this strategy:
This approach works best over time, so it's crucial to accumulate positions gradually.
For better results, it's recommended to trade without leverage (or with minimal leverage) and without stop-losses.
Avoid entering trades at the same price levels, even if the indicator continues to signal.
It's generally better to avoid signals that occur during weekends.
Option №1:
Exit on Opposing Signal. Close the current position at the first opposing signal.
Trading result over 10 days: +17.11% (not considering leverage).
Option №2:
Select a significant (IMPORTANT: achievable) price level of support or resistance, and close trades at that level!
Trading result over 1.5 days: +4.92% (not considering leverage).
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.
