Technical analysts. How much news do you actually read?

[Mr Valand]

Hi all,

As technical analysts, i wanted to know how much news you read and how "in tune" you are with the overall economic picture. I tend to start every trading session with a quick read of the days articles, but it then becomes so difficult to not let this effect my trading decisions.

It would be good to find out if some experienced traders just purely look at their charts and don't read any news at all.

Thanks

 

[songcon]

Hi all,

As technical analysts, i wanted to know how much news you read and how "in tune" you are with the overall economic picture. I tend to start every trading session with a quick read of the days articles, but it then becomes so difficult to not let this effect my trading decisions.

It would be good to find out if some experienced traders just purely look at their charts and don't read any news at all.

Thanks

Technical analysis is the art of looking at the picture, or the chart where all of the news and other information have been discounted into it and you can analyze it to make the decision. The best part of this game is it filters out the emotion element, traders can just look the inter-action of the buyers and sellers to evaluate the "effect" of the emotion of the participants on their trading and make your own trading decision.

Reading the news only stirs up your emotion, while reading the charts provides you a map of the level of emotion of the market participants, and technical analysis also teaches you to wait for the confirmation of the new trend before you get involved.

This is something I'm studying right now:
. . . . . . . Three Premises of Technical Analysis

There are three premises on which the technical approach is based:

Market action discounts everything.
Prices move in trends.
History repeats itself.
Market Action Discounts Everything: The statement "market action discounts everything" forms what is probably the cornerstone of technical analysis. Unless the full significance of this first premise is fully understood and accepted, nothing else that follows makes much sense. The technician believes that anything that can possible affect the price-fundamentally, politically, psychologically, or otherwise-is actually reflected in the price of that market. It follows, therefore, that a study of price action is all that is required.. . . . . . . . . . . .
Read the more detail of the writing from here:
MTA - Market Technicians Association

 

[songcon]

There is a discussion going on that I've found after the posting:

Don't read report or news or research.
http://www.trade2win.com/boards/general-trading-chat/128538-dont-read-report-news-research.html

 

[Mr Valand]

great. thanks for that. alot of different opinions, but all very valid.

 

[jpadventure]

I read a fundy analyst's views on the current events when I'm away from the screen. I don't use news or views to dictate my trading. I surf the wave. When I backtested, I didn't pay attention to news, so I won't do it while live either.

When people talk about leading and lagging indicators, I think of news as the same. Mostly a lagging indicator as the people trade on expectations of data. It can be a leading indicator by following a subscription.

 

[intradaybill]

News is the random part of trading. Expected profit from news is zero.

 

[rathcoole_exile]

zip, zero, nada, null, nuffink

 

[TradingIsFun]

If you use T/A news then becomes a "variable" that can mess with your mind and chart analysis. Read up on TA use Edwards & Magee's classic book. Then give yourself two or three weeks just to test the waters. Watch the charts, do not listen to any news. See how much calmness comes into play.

Two Great Quotes that says it all...

"I found that, for myself, proximity to Wall Street was fatal. I was too easily swayed by the minor fluctuations of the market, the talk about impending mergers, acquisitions, splits; I could never stick to any sort of system while under such influences. Rather, it was during my absences from New York, and especially during the two years of a tour that took me around the world, when I found myself operating most profitably." - Nicolas Darvas

"..if you have satisfied yourself that the charts are, for you, the most dependable indication of the probable future course of stock prices, then you should follow explicitly the signals given on your charts, either according to the rules we suggest here, or according to such other rules and modifications as your experience dictates. But while you are following any set of rules and policies, follow them to the letter. It is the only way they can help you." - Edwards & Magee

 

[MoonRocket]

On my trading platform they supply a news feed into window which I have closed. Everytime a new piece of news arrives there is a little bell sound. When I hear it, I pay particular attention to my chart (FTSE). I have never seen it react.
I know much of the news has nothing to do with this market but some of it must.
So I've come to the conclusion that by the time I get it, it's old news so it's not much point in reading it.

 

[forker]

fundamentals are important unless you are shaving off a tape.

 

[Mr Valand]

Excellent. Thanks for all the responses. I haven't been reading much news over the past 2 months or so and have noticed an improvement in my trading decisions. Less voices in my head has given me clarity in making these decisions.