How best to handle market reactions to major news events?

AirborneTrader

Newbie
7 0
Hi all,

This is a question directed to experienced traders. Those that have witnessed market reactions to important geopolitical events over the years, several bull and bear markets and that have generally successfully navigated rough waters. I've been trading for 5 years and studying the markets for a lot longer. A lot of hard work and studying has been paying off as my trading improves and knowledge increases. One thing I realized yesterday is that I'm lacking a gameplan when major news or geopolitical events take the markets down. Case in point yesterday. I had entered several positions a few days earlier in solid companies breaking out of cup with handle patterns. A few days in and they were all doing good. As the market bounced off its lows I could see volume and participation was low and decreasing. With everything going on and this extended rally I was cautious and 40% invested. So Friday morning when news broke that the Ukrainians had attacked a Russian armoured column I went into defense. Waited for the news to be confirmed, seeing the DAX come down pretty good, bonds go up.. My instinct was to protect my capital and I liquidated all of my positions. I felt good about that. Things are very unpredictable right now. Until later in the day when I saw the markets come off their lows, once again brushing the bad news aside. I felt like I had been shaken out of good positions. More importantly it's lead me to realize I don't have a gameplan or good enough understanding on how to manage positions in times like these.

I'd appreciate learning from you what you've learned over the years. Is it best to wait it out a few days and let the knee jerk reactions settle down? Or at a minimum let the end of day action dictate the best course of action? Or simply get out and observe? We're increasingly in volatile times and looking at the news, it ain't getting better soon. Having such gameplans is key. Thanks in advance!!!! Looking forward to learning from all of you.

Sincerely,
airbornetrader
 
G

Guest36985

0 0
Hi all,

This is a question directed to experienced traders. Those that have witnessed market reactions to important geopolitical events over the years, several bull and bear markets and that have generally successfully navigated rough waters. I've been trading for 5 years and studying the markets for a lot longer. A lot of hard work and studying has been paying off as my trading improves and knowledge increases. One thing I realized yesterday is that I'm lacking a gameplan when major news or geopolitical events take the markets down. Case in point yesterday. I had entered several positions a few days earlier in solid companies breaking out of cup with handle patterns. A few days in and they were all doing good. As the market bounced off its lows I could see volume and participation was low and decreasing. With everything going on and this extended rally I was cautious and 40% invested. So Friday morning when news broke that the Ukrainians had attacked a Russian armoured column I went into defense. Waited for the news to be confirmed, seeing the DAX come down pretty good, bonds go up.. My instinct was to protect my capital and I liquidated all of my positions. I felt good about that. Things are very unpredictable right now. Until later in the day when I saw the markets come off their lows, once again brushing the bad news aside. I felt like I had been shaken out of good positions. More importantly it's lead me to realize I don't have a gameplan or good enough understanding on how to manage positions in times like these.

I'd appreciate learning from you what you've learned over the years. Is it best to wait it out a few days and let the knee jerk reactions settle down? Or at a minimum let the end of day action dictate the best course of action? Or simply get out and observe? We're increasingly in volatile times and looking at the news, it ain't getting better soon. Having such gameplans is key. Thanks in advance!!!! Looking forward to learning from all of you.

Sincerely,
airbornetrader



Buy The [email protected] Dip is the simplest way to put it.
 
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