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in this video guys look out what is by the rumor sell the fact and let's dig into it a little bit in terms of what the other side is thinking it's a bit of gaming Theory here hey guys one welcome to your right so what is buy the rumor sell the fact or sell the news buy the rumor sell the news same kind of thing what is it and let's dig in a little bit and work up a mindset of how it works and also how we can use this to our advantage what circumstances it kind of works and what circumstances it doesn't all right so let's define it first so buy the rumor sell the fact is really the whole idea that you should buy the rumor of good news so rule of good news is potentially going to revalue that stock or that market higher okay flip on and said if you want for going short let's use it long for now you're thinking hey this is good news and it's good for this asset good film denying valuation of this asset so throughout the whole of this may be a couple of months or whatever it is you've got this rumor that this news is going to come and the rumor of good news helps the price to pick up and then when the news comes out the whole whole phrase if sell the fact is that that's when you should sell it so why is that the case and what does actually mean so really if you look at a lot of things like this the case is that very often price will lift up on the rumor and then once the noodles come out that is the high and the market tends to fall off from that not always so let's look at some different scenarios in a moment but that's the whole reason this phrase has come out is that you should trade in line with the rumor but once the fact is out there and the news is there for everyone to see that's the time to sell so the reason for that is that while there's a rumor there everyone has anticipation of this great news it's buoyed up as great new tasers going to be great is going to be you know something fantastic coming out for this stock it's going to change in stock it's going to change the market it's going to change the currency but something is there and the rumor is causing everyone to buy in anticipation of the news because the news is good right it's going to revalue the asset higher so that's what people's thinking this is and your thinking process is probably the same say well this comes out it's all we value the market higher but the thing is right the rumor everybody knows the room it's not inside or in for him that's like a completely separate topic this is a room that everybody is aware of everyone who's trading the stock knows about it there's a big deal coming a big contract maybe there's some sort of massive announcement coming out a macro level whatever the point is everyone is aware of it so it's not exclusive information you've got here so everyone is acting on this thinking guess it's gonna go high it's gonna go hard go higher right so why does it happen when we do get the news that market isn't go any higher well because it's already priced in now the scenarios were it often will go higher is when it's something significant like for example a takeover bid and it's excessively high and that then is a definite price of that because someone's buying that company for X X pound a share X dollars per share that's significant that's gonna go up but if it's something so that's the kind of different scenario but if it's something there's good news as they wouldn't company when your contract or let's say it's a sort of macro event for a country that's fixed something or I suddenly got cleared out a deal or something there's something something significant you can kind of remote your imagination really what's significant the point is at that point in time who's left who buy there were a few people left to buy sure and they're polymer might well be some buying a very often you see a Bev spike oh very often you see that then start to drift off and drift off not always this is kind of you know we've taken as a generalization you of course gonna be some exceptions to rule but the reason is because everybody who's been watching has been waiting for that and then when it comes out all the buyers are already in there's gonna be some more coming in but then what happens by who else is buying everyone who's already watching it is already in everyone who's seen it is now already in full stock to go up or for an assets that go up we have to have buyers to become more aggressive and start taking offers so if they're not there what happens well all of a sudden you've got a massive amount of people who were only in the trade for this point they were buying it for this now they see this everybody is they collect if goes hmm I was in this for this and the market now isn't spiked what do I do now what and that's very often why we see a decline after the news because everybody for an unusual or unusual scenario is that everybody is in the asset for the same reason and the same timeframe the news or most of the time we're trading our set got some day traders in there got some hedge fund managers in there we've got some mutual funds they've got some it got a massive array of people getting involved in it all with different thesis all with different timeframes etc when we're looking everyone's in this I'm sure there's obviously going to be a chunk of people who are holding for along with several interest in news of course but then you've got this all of a sudden you've got collective of people who are looking exactly the same thing and when they don't see the spike up and continue move higher what do they do they sell and that is why guys it's buy the rumor sell the facts so you can get earlier on the rumor you ride the wave of anticipation and then the best thing to be doing in the majority of the time is to ride the anticipation run with the trade let everyone else get so excited about it but have a plan that as soon as that news comes out you watch it you see how it responds if it starts to respond negatively you are first out of that door because otherwise it starts to give in spending depends on the markets on this less liquid stocks that thing just completely dies but some of the thicker stuff you've got plenty of time of course but the thing is then is that you have ridden other people's emotions you have ridden the anticipation space you can get on early enough and you can assume that the anticipation will build the euphoria will build the excitement of a jackpot will build and those people coming in after you will help you to profit and then when the news comes out if you are first out of the door before everyone else starts scratching their head and wondering what's going on that's when you're going to make the most money from this type of trade another way of doing it guys of course is if you're not even in this anticipation phrase you're looking for stuff that has news when the news comes out when it doesn't respond as you want it as people are expected to that often creates a significant opportunity on the opposite side in this case the short side so as by the rumor sell the fact a little bit theory as well behind it from my perspective every thoughts on that the comment section below and of course don't forget to check out our channel sponsors a link to them in the description below and while it down if you liked it thumbs up is appreciate take care guys bye bye you