“Buy the rumor, sell the news” was a term used by traders in the last century. At the time, it was profitable if applied to stock purchases three weeks before the earnings release. A much more powerful principle is a valuable benefit derived from this saying. Professionals know that press releases can change the direction of a market. Therefore, these can be entry or exit points. While amateurs wait for a press release and fall victim to their debating process of interpreting news data, professionals only use the press release as a timing tool for their pre-planned trade execution.
With news, volatility usually increases and more trading volume is at stake. For amateurs, evaluating data in a choppy market environment usually results in execution procrastination, which means that there is no bargaining or chasing deals. Professionals find the liquidity needed to exit a trade or use volatility to smooth out moves with less risk for entries.
The invasion of Ukraine last week was no different. Only those prepared with a plan were able to position themselves in Bitcoin (BTC-USD).
Bitcoin, daily chart, the gift:
A giveaway was a larger and more widespread supply zone across the crypto industry (green horizontal lines on the daily charts above), and predefined buy entries into the crypto space were triggered. Inter-market relationships increase the chances of a successful transaction.
Bitcoin, weekly chart, entry target zone at your fingertips:
With our entry target range almost reached (see our previous version of the chartbook), we were ready to act, knowing that a possible setting point of the longer period was a possibility.
You could say that the price has not penetrated the entry zone. Yet, upon closer inspection, you will identify that due to exuberant volume on the day of the surprise news, supply zone values had shifted to provide significant support just at the edge of our originally forecast zone. Charts need to be constantly updated to stay accurate!
Bitcoin/Gold-Ratio, weekly chart, another stacked advantage:
Precisely on the day in question, we also got a hedging rotating “buy signal” for bitcoin against gold (XAUUSD:CUR) and the SPDR Gold Trust ETF (GLD) on the weekly chart. Therefore, this signal provided another inter-market relational advantage that supported our decision making for aggressive entry. What we can see from the chart above comparing bitcoin to gold is that since institutional money has become a massive part of bitcoin holdings, these larger funds are rotating their money between Gold and Bitcoin as well as the Grayscale Bitcoin Trust (OTC: GBTC).
Following the yellow line, we can see that prices are high to buy bitcoin with gold in double top, and acquiring bitcoin in double bottom is a way to take advantage of cheaper bitcoin prices compared to gold. gold. For us, a good reason to assume that gold holders could switch to bitcoin for the next foreseeable period, to hedge their wealth preservation portfolios.
Bitcoin, daily chart, reserved profits and leeway:
The weekly chart above shows four additional top-ups over the past five days. All trades were mitigated with our quadruple exit strategy. Therefore, the remaining position was market money with no risk to us. We posted daily calls to prepare interested parties for possible re-listings. Prices are already up nearly 30% from lows.
This preparation and the simple respect of the rules allow you to position yourself and not depend on the maturity of a turning point. Even in a negative result, profits were made. With luck, these remaining positions can go a long way and provide substantial additional profits. In addition, we position ourselves early even before a trend is established.
Bitcoin, buy the new:
We have to confront the debates of opinion driven by the ego (the need to be right). We use retraining behavior to get the best results. The goal in mind is to “erase” intuitive responses and turnaround leading to lower than normal input lag. Therefore, a consistent extraction of profits from the market is possible.