Why do you not trade using news?

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Bakez

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I have seen many times posters on this forum that trading with the news is a no go zone. But why? Surely the current news, economic data, current affairs etc do make a big difference and ignoring them is a big mistake. At the end of the day all your trend lines, support levels and what not are just showing you supply and demand, they are not giving you a reason why it is at that price.. and yet you may have a trade that is going well and some news breaks and completely reverses the price and ruins it..

So why do so many choose to ignore it?
 
Event trading is a no go for most traders. Don't just think how many wonderful opportunities you missed. After the settlement of event effect, you will be thankful how many whipsaws you just avoided.
 
Bakez said:
I have seen many times posters on this forum that trading with the news is a no go zone. But why? Surely the current news, economic data, current affairs etc do make a big difference and ignoring them is a big mistake. At the end of the day all your trend lines, support levels and what not are just showing you supply and demand, they are not giving you a reason why it is at that price.. and yet you may have a trade that is going well and some news breaks and completely reverses the price and ruins it..

So why do so many choose to ignore it?
Click to expand...

Have a look at any US$ pair on a 1 hour chart today and you'll get some idea ;)
 
Bakez said:
I have seen many times posters on this forum that trading with the news is a no go zone. But why? Surely the current news, economic data, current affairs etc do make a big difference and ignoring them is a big mistake. At the end of the day all your trend lines, support levels and what not are just showing you supply and demand, they are not giving you a reason why it is at that price.. and yet you may have a trade that is going well and some news breaks and completely reverses the price and ruins it..

So why do so many choose to ignore it?
Click to expand...

The market tells you everything you need to know in advance. I understand that this isn't the case with unexpected events such as terrorism, natural disasters etc, but this is why you should always trade with a STOP.
 
Technicals seem to hold well outside of news. Then when the news breaks, you'll find the technicals fail. Previous yearly highs get smashed through. A 4 year trend line on the weekly chart gets whipsawed by 200 pips. A nice uptrend has an apparent sudden reversal of 300 pips by the end of the day. And it isn't even in a straight line.
 
so, on the basis of todays news can you pinpoint why the dow began to crash at approx 4.15 (GMT) then turned and rallied at approx 7pm? Why gold suddenly spiked today (at approx 13.50) and or oil oscillated so wildly? No, neither can I and TBH I don't give a flying re the news now, don't even trade the reaction to it, it's just noise, I trade the charts, nothing else. There were 4 perfect trade entries today on the DOW (from 8 this morning*) that could have yielded approx. 400 pips. Any other method is simply a punt and punts are for...well fill in the last word yourself.:D

* edit bit
 
Last edited by a moderator:
I think you can trade news but only things that are unexpected, such as an ECB member dropping a clanger - you jump on the schatz. Other more run of the mill news is often priced in or leaked (ZEW and the Germans springs to mind), so it's barely worth trading it. Stick to the charts; the day you interpret news quick enough and manage to jump on it are your bonus days, but don't bank on them happening on a regular basis.
 
Grain said:
I think you can trade news but only things that are unexpected, such as an ECB member dropping a clanger - you jump on the schatz. Other more run of the mill news is often priced in or leaked (ZEW and the Germans springs to mind), so it's barely worth trading it. Stick to the charts; the day you interpret news quick enough and manage to jump on it are your bonus days, but don't bank on them happening on a regular basis.
Click to expand...

I missed most of the DOW's big move on Monday, wasn't around all day to 'play' it. However, always content by the fact that once those big news moves are out of the way saner fundamentals and technicals come to the fore the following days. But if I had been there to play I'd have made the extra pips through effective chart use anyhow, so again, the news, what's the point? I'll wait 5-10 minutes to make 100 pips rather than be in at the 'b of the bang' taking 120 pips.:)
 
Bakez said:
I have seen many times posters on this forum that trading with the news is a no go zone. But why? Surely the current news, economic data, current affairs etc do make a big difference and ignoring them is a big mistake. At the end of the day all your trend lines, support levels and what not are just showing you supply and demand, they are not giving you a reason why it is at that price.. and yet you may have a trade that is going well and some news breaks and completely reverses the price and ruins it..

So why do so many choose to ignore it?
Click to expand...

Just look at cable after new home sales figures came out. Approx 180 pts up in 10 mins and then all the way back down lower than it was before figures were released. Short term support and resistance levels got broken in a period of 30 mins. Trade the news? No, thank you
 
FULL Of?

new_trader said:
The market tells you everything you need to know in advance. I understand that this isn't the case with unexpected events such as terrorism, natural disasters etc, but this is why you should always trade with a STOP.
Click to expand...
"The market tells you everything you need to know in advance"= Full of ****
 
When people say "you cannot trade news" or "you cannot do x, y or x" they usually mean "I cannot/do not trade news, or do x, y, z".

Why don't you go research, try it out and come back with the results. A demo account, paper and pen cost nothing.

I found this googling, there's a start

Trading On News Releases
 
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At the end of the day all your trend lines, support levels and what not are just showing you supply and demand, they are not giving you a reason why it is at that price..
Click to expand...
A very thought provoking sentence
Anyone have any views on the above
 
new_trader said:
The market tells you everything you need to know in advance. I understand that this isn't the case with unexpected events such as terrorism, natural disasters etc, but this is why you should always trade with a STOP.
Click to expand...
Coming from the Forrest Gump of the trading world this is high comedy. “The market tells you everything in advance….but this isn’t the case with unexpected events…”. LOL.

Either it does or it doesn’t tell you everything in advance. Which is it?

Even Bertie couldn’t get that one quite right and in fact, it was that silliness which precipitated his own swan song after being thwacked with a rolled up copy of the Time by a passing Black Swan on its way to the invisible ‘Vanilla Options’ exchange. LOL.

Look mate, get rid of the purple wizard’s robe you got from Toys R Us (it was always way too big for you anyway and the white stains are unsightly), stop believing in fairy stories and start doing the hard yards.

There are enough, not many, but enough bods on here who know what they’re doing and are willing to help others along for you to benefit from simply listening afresh to that which you have thus far demonstrated has not been able to gain even a small foothold in the flinty and inhospitable pastures of your frontal lobe.

Give my regards to Jenny.
 
case777 said:
When people say "you cannot trade news" or "you cannot do x, y or x" they usually mean "I cannot/do not trade news, or do x, y, z".

Why don't you go research, try it out and come back with the results. A demo account, paper and pen cost nothing.

I found this googling, there's a start

Trading On News Releases
Click to expand...

agreed, my overall point is that you can trade the reaction to the news that you eventually see bleeding onto the charts, therefore don't trade the news, be aware of it, understand the way markets move and why, have a hunger for knowledge on world events, keep the grey matter alive to macro economics etc...

Here's a thing, most pundits expected a rally on the DOW on the day of Obama's inuguration, so did I, didn't happen, only interest to me was what happened on the charts, "wow, didn't expect that, but heh, what the hell...":)
 
TheBramble said:
Either it does or it doesn’t tell you everything in advance. Which is it? .
Click to expand...

Dear Connie Brown or The Degrees or..

To Whom it may concern,

The pattern is the same with you. You come, you go, you come make nuisance of yourself, get banned, get reinstated, you go, and come back. Why is that? Can't make money practicing the hit-and-miss hackneyed, banal, trite rubbish that you preach to any half-wit newbie naive enough to listen? Back here again to try to pick peoples brains?

You spend your time and money figuring out which 'it' is...OK?

You are an unbelievably insufferable bore. :sleep:
 
new_trader said:
Dear Connie Brown or The Degrees or..

To Whom it may concern,

The pattern is the same with you. You come, you go, you come make nuisance of yourself, get banned, get reinstated, you go, and come back. Why is that? Can't make money practicing the hit-and-miss hackneyed, banal, trite rubbish that you preach to any half-wit newbie naive enough to listen? Back here again to try to pick peoples brains?

You spend your time and money figuring out which 'it' is...OK?

You are an unbelievably insufferable bore. :sleep:
Click to expand...

either this purple stuff is for real, in which case you're truly an ****, or it's an act - and you really don't need to act.

how does it go....

***UNSUBSCIBED*** ROFL.

UTB
 
Black Swan said:
agreed, my overall point is that you can trade the reaction to the news that you eventually see bleeding onto the charts, therefore don't trade the news, be aware of it, understand the way markets move and why, have a hunger for knowledge on world events, keep the grey matter alive to macro economics etc...

Here's a thing, most pundits expected a rally on the DOW on the day of Obama's inuguration, so did I, didn't happen, only interest to me was what happened on the charts, "wow, didn't expect that, but heh, what the hell...":)
Click to expand...

You can trade the news ,but you do it either anticipating it ,or leaving it well alone if in doubt .That's why we have the saying buy the rumour, sell the news, as often preceding price action anticipated the general reaction ;) ..yes, I know trade what you see ..LOL and get whipped to death ;)
 
Trump trend?

Black Swan said:
agreed, my overall point is that you can trade the reaction to the news that you eventually see bleeding onto the charts, therefore don't trade the news, be aware of it, understand the way markets move and why, have a hunger for knowledge on world events, keep the grey matter alive to macro economics etc...

Here's a thing, most pundits expected a rally on the DOW on the day of Obama's inuguration, so did I, didn't happen, only interest to me was what happened on the charts, "wow, didn't expect that, but heh, what the hell...":)
Click to expand...
Dollar Trumps TREND?......http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=3&dy=0&id=p87697883087

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=3&dy=0&id=p87697883087
 
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