The world of Cryptocurrency is governed by data and the information you can deduce from it. But stuffs like news also inform decisions and in what way trades go. There are three basic forms of information that you can operate by and your ability to effectively use these information will determine how profitable a trader will be. These types of information include the following;
BEHAVIOURAL:
It is an innate human instinct to always go with the crowd and majority. We do not like feeling left out and so when we see the majority going in one direction, the Fear of missing out (FOMO) will push us in that direction. And when we fail to imitate the crowd it makes you feel at risk and in danger of losing out on the gains. Although it can be very difficult to practice because of the noise that follows, an edge can sometimes come from being in a contrary position to the general market. If everybody expects sustained high growth, you can go in the contrary position as it might be getting overpriced and a reversal might be near. This is what is meant by Behavioural info, you study the general behaviour of the public and you go against it. This is why the popular market adage by Warren Buffet is often cited, “be greedy when others are fearful and be fearful when others are greedy”.
INFORMATIONAL:
This is when a trader is privy to some information which is not yet public news yet, this information is definitely capable of increasing price and so the trader has an edge because of it. For instance, if you are friends of say the CEO of Ripple and they are about to announce a massive partnership with Google to pay their employees in Ripple. This type of partnership will increase the price of Ripple so you could trade on it and it gives you an edge. But sadly not everyone will be friends with a CEO or have close ties to a Bitcoin whale who will inform you when him and other whales are about to dump on the market.
ANALYTICAL
Analytical info is the type of information gotten from a better understanding of how the market operates, better tools and methods for analysis and better researching skills. Effectively using analytical information could mean years of learning better and more effective analysis method. It involves a lot of studying and a lot of learning and unlearning.
