Someone emailed me asking "why read the news...(re-post #14)...as everything is in the price."
I don't believe that for a moment. Price on trades printing off is about what people buy and sell at and that is often not in line with the hundreds of ways people "value" a stock or anything else. Value or worth is not price .
I don't really want to get into all of that, but I feel strongly that anyone who trades on the basis of the previous day's price at the start of trading should have a good idea of the environment they are trading in. In other words, what overnight news or events are dictating sentiment on the new trading day?
You should never trade purely on news, but on the reaction of the market to that news or environment, be it oil price, stock sector, FX, interest rates, economic news or several other things, even weather.
In my opinion to trade purely on technical analysis in its classical sense is to ignore so much else and invites failure.
For me, TA is part of reading the market activity.
Again I'm talking here about stocks, not FX and other instruments.
You don't go out and do anything without knowing something about what the environment is like today.
You don't work without knowing what current conditions might affect your work. Not rocket science.
Richard