#MyTradingStyle 💥 “Buy the rumor, sell the news” is a trading strategy and psychological reaction that is very popular in financial markets, especially with crypto, stocks, gold...

- "Buy the rumor": Buy in before the official news is announced, based on positive expectations.

- "Sell the news": Sell when the good news is confirmed, as the price has often already reflected those expectations.

💥 Example of U.S. CPI news:

- Before the CPI news: Expectation that CPI will decrease -> Fed will lower interest rates -> coin price will rise -> Investors start buying in advance, gradually pushing the price up since yesterday.

-->> This is “buy the rumor”

- When the news is announced:

Although the expectations were correct, the price does not increase strongly anymore.

Instead, many people take profits because they had already bought earlier. There is no more buying momentum when the news is released.

-->> This is “sell the news” – the price reverses and decreases despite the good news.

💥 Specifically: The price has already reflected expectations, those who bought earlier have pushed the price up since early. When the news comes out, there is no strong new buying force.

-->> The news is not too surprising: If the news meets expectations (not exceeding), the market considers it normal.

-->> Early buyers often take profits right after the news comes out, leading to selling pressure.

--->> On-chain data & exchanges show low trading volume. Lack of cash flow to push prices.

-->> Derivatives & liquidations create pressure: After the good news, many margin orders are opened -> L crowded -> When the price does not continue to rise, those positions are liquidated, causing a price “domino” drop.

-->> Bots and hedge funds take advantage of high liquidity to push prices down to create profits from shorts.

💥💥 What should you do???

- Buy early according to news expectations, but take profits before or right after the news comes out.

- If you haven't entered a position beforehand, you shouldn't FOMO buy right after the good news, as it is easy to buy at the peak.