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[My exchange of choice for this experiment was Binance.]
If you're a follower of the Psycho Crypto Blog, you'd know how much I love reading crypto news.
I'm a technical trader(I use technical analysis to guage my trading choices), but I found that mixing my technical skills with the news yielded greater results.
The news helped my analysis make actual sense.
It acted as a kind of confirmation for my analysis.
But I decided to risk actual money by making decisions based on only the news.
That's right. No technical analysis. No trend lines. Nothing. Just reading the latest news and making trades based on that.
Obviously, I won't be able to make many trades a day using this method. So I limited the experiment time to 18 hours.
And boy did it go well!
I followed a crypto news site on twitter that constantly spammed me with the latest Bitcoin news. I'm talking updates every half hour.
And with those news articles, I was able to make more successful trades than unsuccessful ones.
I found that when the news seemed bullish and I entered the trade, the price actually rose a few pips, and I actually made some money.
Other times though, Bitcoin faked me out, and once ran through a stop loss. But that only happened once.
The remaining trades I made were very profitable, although they could have been much more profitable if I knew exactly where to take profits.
The problem with news is that it doesn't tell you to buy or sell.
So I usually sold whenever I saw a red candle.
But most of the time, these red candles were simply buyers trying to get a better deal, and the price still went on to soar through the sky.
So should you do this?
Absolutely not! I have some experience trading, so I could 'guage' my entries and exits a lot better than a beginner would be able to.
That said this experiment taught me that news is just as important as the analysis a trader does.
This is by the way, but if you want to instantly exchange between cryptocurrencies, Changelly does that for you with NO fee till the end of this month. Check it out here.
