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Trading Trump’s Tweets

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Trump twitter

Even after more than 500 days in office, the unconventional style that President Trump has brought to the White House continues to offer new opportunities for creative traders. The latest example of this is a set of new strategies designed to take advantage of any clues about economic data releases and company-specific news that Trump tweets out.

Trading strategies that track the President’s tweets and place trades in the market accordingly have reportedly been used successfully on a number of occasions. One example was immediately following the announcement of new tariffs on China and the EU, when Trump’s tweeting directly affected both metal prices as well as individual companies.

Trading Trump's Tweets

On GitHub, an online hosting service for computer code, interested traders can even find an open-source trading bot called Trump2Cash that scans Trump’s tweets for any mentions of publicly traded companies, and then uses sentiment analysis to decide on whether the tweet will affect the stock price of the mentioned company positively or negatively. The bot then proceeds to automatically place a trade in accordance with the expected market reaction to the tweet. You can read the full background story of the bot in this blog post.

 

Another interesting strategy that has been proposed is to pay attention to the self-praise coming from the President’s Twitter account. For example, one could pay attention in the hours and days leading up to the first Friday of every month when the US Department of Labor releases its monthly Jobs Report at 8:30 AM. It’s well-known that senior members of the administration are briefed on the data the evening before it is released to the public, and it appears they sometimes have a hard time keeping quiet about it.

Here is one example from Friday June 1st that was published at 7:21 AM:

Trump tweet

As you may have guessed, the numbers that came in exceeded expectations, with the unemployment rate dropping to an 18-year low of 3.8%, better than the forecasted 3.9%.

How to trade tweets

Other than the trading bot mentioned above, the next question now becomes how can we trade on these tweets. To keep things simple, let’s stick with the above tweet as our example case.

  1. The most obvious way to trade this would probably be to go long the US dollar against other major currencies like the Japanese yen or the euro. For example, anyone who bought USD/JPY right after Trump tweeted, could have made 0.40% by selling again within 2 hours.
  2. For those who prefer the stock market, going long the S&P500 would also be a natural choice. The problem here is that the numbers are released before the stock market opens in the morning, meaning prices have most likely already rallied by the time you are able to trade. One way around this would be to buy index futures on the S&P500 or a CFD (they are normally traded 24 hours) with the index as the underlying asset. On the day of this tweet, we saw a strong rally in index futures shortly after Trump’s tweet was published.
  3. Another strategy involving precious metals would be to go short gold, for example by shorting the popular GLD ETF or by shorting CFDs or futures tied to the gold price that are traded around the clock.

Since Trump’s tweets are public and for anyone to see, the trick here is to be prepared when numbers are expected to be released, and then act fast. Trump is a president who undeniably does things in a very different way from what most market participants are used to. As traders, our job is not to judge on how politicians do their job, but rather to take advantage of every single opportunity they hand us to make money from the market.

Featured image from Pixabay.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Altcoins

Will Ethereum Continue Rally Ahead Of Constantinople Hard Fork?

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“Clear eyes, full hearts, can’t lose.”  One of my favorite quotes from “Friday Night Lights” is a great way to describe the new year.  2018 was rough, brutal, and painful.  But with a new year comes new opportunities.  Crypto markets have started off strong during the first week of January.  Bitcoin gained nearly 5% on Sunday and now trades at approximately $4,060.  The broader crypto market has also followed suit as several notable coins have generated substantial gains.  Those coins include:

  • Ripple (XRP) with a 3% gain
  • Litecoin (LTC) with a 10% gain
  • Stellar (XLM) with a 5% gain
  • Ethereum (ETH) with a 2% gain

While the gains are a great way to bring in the new year, the market is still very cautious regarding the next step.  For cryptocurrencies to truly break out of the current bear market, they likely need to reach a market valuation of $230 billion.  Bitcoin would also need to trade at approximately $6,000.  So, based on today’s levels, there is still substantial work left to do.

Ethereum Hard Fork

Binance has just announced plans to support the Ethereum Constantinople Hard Fork which is currently scheduled for January 16th.  Traders need to be reminded that January 16 is the expectation, but nothing is set in stone.  When asked about the firmness of the data, Peter Szilagyi, an Ethereum core developer had this to say: “We can just mid-January, it doesn’t make a difference if we decide on a date or not.  We can always postpone.”

Ethereum has already had to delay the Constantinople upgrade once before after developers detected some errors on the testnet platform.  Given the complexity of the upgrade, it wouldn’t be a surprise if an additional delay was necessary.

Is the Hard Fork Necessary?

In a word, yes.  There are a few issues at play here.  The first is the “difficulty bomb.”  The difficulty bomb is the term used to indicate the increasing level of mining difficulty that results in an increased amount of time required to mine a new block on the Ethereum blockchain.  Block times are expected to begin increasing this month and could hit 30-second block times by May.

Some traders may be wondering why this “bomb” was put in place.  It’s a bit complex but essentially was designed as a deterrent for miners, who may opt to continue with Proof of Work (miners compete directly against each other), even as the blockchain transitions to Proof of Stake (where rewards are based on staking).  With the bomb in place, Ethereum will need to undergo regular network upgrades.

The Constantinople Upgrade

Constantinople is a system-wide upgrade that was enacted at the end of August, 2018.  The upgrade includes five different Ethereum improvement proposals (EIPs).  After the proposals are released on Ethereum, the blockchain will be permanently altered with new backwards-incompatible upgrades.

This essentially means that the network of computers that run Ethereum software must either update or continue running independently.

There is no doubt that hard forks have caused a great deal of squabbles in the past.  The most notable of which occurred with the Bitcoin Cash (BCH) hard fork.  Roger Ver, known as “Bitcoin Jesus” and the most prominent supporter of Bitcoin ABC, took a position in favor of the new software upgrade.  On the opposite side, Craig Wright, who claims to be Satoshi Nakamoto, was in favor of expanding the maximum block size from 32MB to 128MB.  ABC appears to have won that war.

Ethereum Rally Can Continue

Ethereum has had a monster rally over the past 30 days, gaining more than 80%.

So, while Ethereum miners are likely quite anxious as we approach the hard fork, the broader market appears to be quite fond of it.  I expect the rally to continue as we approach January 16th.

One risk is that if developers announce another delay.  A short delay probably wouldn’t have a major impact on price, but a delay of any meaningful length could lead to a selloff.  Traders looking to initiate a short-term trade may want to make use of stop limit trades.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Encrypgen (DNA) Surges 50% On Heavy Volume

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As the new year begins, crypto traders are certainly filled with hope that 2019 will be more bullish than last year.  There was an article I read a few days ago that laid out some really strong reasons why traders should be optimistic about cryptocurrency in 2019.  The logic is sound.  And while diversified crypto portfolios are always the best bet, traders may want to make Encrypgen (DNA) a large part of their portfolios.  I expect DNA to be one of 2019’s top performing tokens.

Strong Trading Session

During the past six months, I’ve written extensively on Encrypgen as I feel the company has significant potential.  And now, with the new year upon us, it appears that other traders are finally catching on.  DNA exploded nearly 50% on one of its largest volume days in recent history.  The coin has since re-traced but is still up approximately 30% (as of this writing).

This is especially significant because of the large sell wall that had been in place for weeks.  One large token holder needed to exit the position for personal reasons.  And those tokens are now held in strong hands who believe in the project.  Now that the sell wall has broken, DNA hodlers can expect significant growth, both in the business and in the token price.

Encrypgen Team Focused On Business Growth

While not true for many crypto projects, Encrypgen has been focused on the core business regardless of the token price.   In December, Encrypgen announced a partnership with Murrieta Genomics.  This has the potential to be an invaluable partnership as Encrypgen continues to see increasing genomic data sets uploaded to the Gene-Chain.

In addition to working on getting consumers to upload their genomic data sets, Encrypgen is also getting researchers to sign-on to the platform.  For a true marketplace to occur, it is of course necessary to have both buyers and sellers.  On the Gene-Chain, consumers are the sellers and researchers are the buyers.  Researchers will use DNA tokens to purchase data direct from consumers.  This volume is what will end up driving the DNA token price.  The vision is for Encrypgen to become the Amazon.com of genomic data.

Future Developments in 2019

As the company continues to progress, token holders can expect significant developments throughout the rest of the year.  Some of these expected developments include:

  • Additional Partnerships
  • Venture Capital Funding
  • Genomic Data Set Growth
  • New Exchange Listings

There is no doubt that cryptocurrency can be a momentum game at times.  And now with the recent surge in DNA trading, Encrypgen appears to have significant momentum.  The question will be if the company can maintain it.

DNA token hodlers can expect to see a barrage of news coming out in the next few weeks and beyond.  Many of these announcements will center around additional partnerships that will help drive the company’s core business.  In addition to that, the company is securing additional funding from a venture capital deal.  If a VC deal is completed, it could have a significant impact on the token price.  As the business progresses, it will also be important to keep an eye out for signs of growth in the number of genomic data sets that consumers have uploaded to the Gene-Chain.  The more sets that are available, the more transactions that will occur between consumers and researchers.

Lastly, but probably least importantly, will be news regarding new exchanges.  Encrypgen maintains its position that it will not pay bribes to have its token listed on exchanges.  And that is certainly the right decision.  But, hopefully, legitimate large exchanges like Bittrex will see the potential that the DNA token has and list it.  If that happens, it would be a boon for the DNA token price.

Conclusion

Encrypgen remains the top position in my portfolio.  Although 2018 was a rough year, I certainly expect that to turn around during the next 12 months.  And while I expect many altcoins to participate in a crypto rally, I fully expect DNA to be a top performer.

Disclosure:  Chris has a long position in DNA

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Bitcoin

Mainstream Adoption of Bitcoin Will Send Price Soaring

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The pain inflicted by the crypto markets has been extreme this year.  It’s become clear that the market ran way too high, way too fast in 2017.  Many traders knew a severe correction was forthcoming, but I doubt many predicted the correction (now a full-fledged bear market) would be this extreme.  While the markets have been painful, Bitcoin (BTC) serves a bigger purpose than just making money in the markets.  To some, that purpose is a worldwide digital currency that can eventually be used to purchase anything.  To others, the purpose is a store of value to prevent against the inflation that plagues FIAT currencies.  Either way, it’s important to remember that this is just the beginning.

Early Phase of Adoption

Bitcoin is still in the very, very early phase of adoption.  Let’s look at the graph below.

The technology adoption life cycle is a sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups.

Many consumers still have no idea what Bitcoin is.  When people google the term Bitcoin, they are likely to get the following definition:  Bitcoin is a digital currency that is not backed by any country’s central bank or government.  Bitcoins can be traded for goods or services with select vendors.  But the truth is that Bitcoin can’t be used to buy things that would be useful for most people.   Consumers can’t use Bitcoin to buy groceries, pay the cable bill, pay for medical expenses, buy a car, or purchase a home.  For years, Expedia (one of the world’s largest travel booking engines) allowed consumers to use Bitcoin to make hotel reservations.  But even that was taken away in June.

Clearly, Bitcoin has yet to achieve its intended goal.  Based on the graph above, I can confidently claim that Bitcoin is still in the innovators phase.  In fact, one big innovation in the future may help push Bitcoin into the early adoption phase.

Lightning Network

Although Bitcoin took the world by storm in 2017, one big problem has always loomed large; scalability.  The ability to scale to the required size was a concern when Bitcoin was first introduced to the world and it remains a problem that needs to be addressed.  What does scalability entail?  Well, let’s look at the visual below.

At present, Bitcoin is only capable of processing approximately 7 transactions per second.  Compared to PayPal, Ripple, and especially Visa, Bitcoin needs to improve dramatically.  One way that Bitcoin may be able to perform significantly better is through the lightning network.

It’s currently estimated that the lightning network will have the potential to process 1 million transactions per second.  While that sounds great on paper, it’s still just theoretical.  Once the network becomes operational, its true greatness will be determined.

Conclusion

Although Bitcoin has had a rough 2018, it’s important to recognize that the future still burns bright.  Bitcoin is still in the innovators phase of adoption.  And while the lightning network is set to address Bitcoin’s biggest hurdle, better days are ahead.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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