A trader explains two ways to profit from Trump tweet-driven price spikes: enter quickly after the jump with a large stop below the prior consolidation zone, or wait for the pullback and trade the reversion to that zone. Both rely on identifying consolidation levels and break-of-structure signals.
Price is here. Out of nowhere, Trump tweets something extremely positive for the economy and then it goes all the way up here. So this would be my new fair price. You are allowed to do 2 different types of trades with unexpected news. First one is a continuation. If you are able to get in somewhere here, you're going to have a slight positive expectancy in terms of news drift. If you're able to get in as soon as you see that tweet, as soon as you see the chart having a huge jump, then that's slight positive EV and give myself the largest possible stop loss because you don't know exactly where the fair price is. Would that look to be below previous consolidation? Yeah. After this, you can also take a similar type of news drift. There's consolidation here. If it breaks structure up, then I would take another news drift trade long. On top of that, I would trade a reversion. Consider it keeps going up. After that, I would revert back to most recent consolidation.
