Research Summary
The report discusses the concept of news trading, the use of bots in this process, and the potential benefits and drawbacks of such an approach. It delves into the importance of timing and interpretation in news trading, the role of Telegram bots like Newsly in facilitating quick action on news, and the psychological aspects of trading. The report also provides insights into the hierarchical ladder of news trading and the importance of understanding one’s position in this hierarchy.
Key Takeaways
Understanding News Trading
- Definition and Importance: News trading involves acting on various catalysts for price movements. The ability to interpret news quickly, understand how other market participants interpret the same news, and predict how fast the news is likely to spread are crucial in news trading.
- Timing is Crucial: When news comes out, timing is everything. Traders need to make quick interpretations and judgments on how likely the news is to spread to market participants.
- Psychological Aspects: Trading psychology is important and can often be a struggle. Fear of losing can impact decision-making and risk management in trading.
Role of Bots in News Trading
- Newsly: Newsly is a Telegram bot that allows users to view news and execute trades instantly through 1-click. It aims to be a quick curated source of crypto news and a full-fledged trading terminal.
- Benefits and Drawbacks: While Newsly provides the edge to act on news instantly, the worth of connecting one’s Centralized Exchange (CEX) to a bot when they could just swap apps to long/short on their CEX directly is debatable.
- Tokenomics: Users currently require 10,000 $news to utilize certain features on the bot. The worth of holding these tokens to utilize a bot is unclear.
Hierarchical Ladder in News Trading
- Understanding the Ladder: The hierarchical ladder from A to G indicates at which price one will enter a trade, with A being insiders and G being laggards.
- Position in the Ladder: Understanding one’s position in this order is important when news trading. The crypto market is inefficient, so some catalysts take time to properly price in.
Actionable Insights
- Improving Timing: Traders should find ways to get higher up on the ladder in terms of timing the news. This could involve working with people to make bots or other strategies.
- Patience and Practice: News trading requires a lot of patience and practice. Traders should be prepared to work on their edge for years and may still struggle.
- React Quickly: In trading, it’s important to react quickly. Traders should aim to calculate the Expected Value (EV) more accurately and take position earlier than most other participants.
