Trading the News:
1. News tends to have less impact on the market over time, especially if it's the same information being repeated (ETF flows, GBTC on Coinbase, German government, Gox, SEC crusade, etc.). Eventually, everything settles down.
2. News is more efficiently priced in than unexpected events. For example, "X will happen in the future on day Y" is more likely to be priced in than "BREAKING: Y just happened."
3. The market's reaction to the news is often more telling than the news itself.
Sample plan:
Bad news absorbed in a bull market = trend continuation
Bad news absorbed in a bear market = trend reversal
Good news absorbed in a bull market = trend reversal
Good news absorbed in a bear market = trend continuation
This works especially well if there is a clear preceding pattern, such as bad news = down, bad news = down, bad news = down, and then bad news = up.
As always, there is a lot of context and nuance around all this, but it is a worthwhile way to start thinking about it.
