What is news trading?
It means opening a transaction based on news, but this does not always provide a net profit. It can create a FOMO effect and is risky. The important advantage is early access to the news. If you reach a news late, the pricing may have already occurred. When you enter, those who reach early have started selling and you will be in the opposite position. This situation is called "buy the rumor, sell the news" in the stock market.
Recently, the expectation of the Fed's interest rate cut was already priced in. The Bitcoin price, which fell to 58k and rose to 61k, was supported technically and by fundamental data. The news of the interest rate cut pushed the price up.
The 1st candle was formed in the morning with the expectation of a rate cut. A 50 basis point decrease was expected.
The 2nd candle shows the moment the news occurred. There was buyer pressure, but the real dominant sellers were. When the expectation came true, people got fomo and entered from the top, making losses. The difference between the candles is around 3%, which means high volatility. Those who opened a transaction with 10x leverage experienced a 30% loss. Both long and short traders were stopped or liquidated.
It is possible to take an early position and make a profit in such news, but it requires experience.