Frontrunning Uninformed Traders
Taking advantage of people misinterpreting data
We all know that there are a bunch of uninformed trades being done.
Remember the fake news release of Bitcoin getting approved? There were very clear warning signs indicating that it’s fake yet the market still moved like crazy.
Even though there was no information in this news release we know exactly how people would react, they would buy.
There are 2 trades you could have done knowing that the news are fake:
Enter a long, wait for more uninformed traders to go long as well and exit quickly
Enter a short and wait for people to realize the news was fake and start selling.
There is another moment where people misinterpret data and enter a trade even though there is no new information in the market. We are gonna take advantage of that since we know exactly how those people are gonna react to that misinterpretation.
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Table of Content
Trade Idea
Researching
Backtesting
Final Remarks