anyone trading off news?

T

tempula_99

Hi,

I see a lot of people here trading technically, whether it' s daytrading, scalping or system trading or what else.

Are there people out there trading only off news? You know, ups and downgrades, m&a, earnings, oil stories, breaking news.

I' m asking that because it' s the way I trade : only off news.
For example, Friday was a nice day, with oil and software stocks. There was also that retail sales, but this one didn't work (I tried to short WMT, following weak retail sales, but it didn't work).

By the way, I absolutely have nothing against technical traders and I don' t mean to pretend they trade the wrong way. Each one with its own method : the one he feels comfortable with (I felt the need to precise that following some reactions I saw on those boards : some people are extremely susceptible it seems :) .

So, if someone trades off news and wants to share some experiences, it would be nice.
 
Congrats that you're able to trade successfully off of news.

Can you share your methods of picking which news to trade off of, and do you trade in the direction of the news, or do you fade it?
 
Perhaps its because I don't know proper interpretation of news but NEWS GETS ME KILLED everytime. I stopped trading on news and now simply pay attention to it for general information. Its nice to know if a stock position you're in just had the company discuss an SEC investigation ;)

When I chased a buy-out story it was always the one everyone else knew was unlikely to occur. When I chase most other things I'm late for the show.

Please do tell what methods you're using, although since concentrating on Techs my P&L looks a lot better than it did b4 so I doubt I'm going back.
 
Yes, I can, and I would be happy to.
Actually, we ' re a group of 4 traders. We ' re from Brussels (Belgium) and we trade only this way.

Friday, I went long MSFT on the open. I was not sure as the nasdaq was gapping up, but it worked. I tried to keep trading it up all day long, finding some good relative strenght in the group.
MERQ scared me off with that open (it opened up some 10% if I remember, and I was looking for a pullback on some rounds to get long, but it went straight up). SEBL was another possiblity, but with all those problems of late, I thaught that It might show some relative weakness to the group. It was not the case, but anyway.

Also, oil was a real pleasure : we were sure it would go down, and as ever the OSX is the place to look for, as it is so volatile.

Our only mistake was to get short on WMT. Those retail sales being weak, we thaught it might be weak. As we saw some problems on european retail stocks, we thaught it might work in the US too... But no. And WMT had even a great day!

For what regards this week, we did well, although we had some surprises.
Monday, it was oil with Saddam (didn' t work) INTU and IBM. That gap opening was some kind of a problem as ever when it does gap, but we did well.

Tuesday, NWX, with NT and those rumours on CSCO.

Wednesday, we tried to play YHOO up ahead of its earnings. A mistake (playing stocks ahead of earnings starts to be hard those days). We were looking at CSCO, and we had some nice moves on the defense sector, although we were really surprised by the strenght. We got out too early, and didn't trade it up after.

Thursday, we were on the telco debacle in the EU, following BT entering (again:) ) the GSM sector.
We heard about the rumours on IBM before the bell (for once, briefing.com was worth), and it did really well. But again, we were not expecting such a rout, and got out too early.
We stayed off GE, which was the event of the day. And it was not a bad decision, as that fall really took us by surprise.

Anyway, each and every day, there is something to do. We also trade Europe as we started on those markets. And you guys should really take a look at it (xetra, ftse and cac, the bests we think).
 
No offense but you just listed a few of your picks from last week. I'm glad you had a good week but you really didn't explain any methodology. I can read a good/bad story and guess too. In fact I did that very thing for about 2 months and got crushed.

Do you have some specific do's and don'ts? Or you just telling us how good you are at it and leaving it at that?
 
You didn't give any parameters for the type of news you play, aside from guessing, hoping it works, and getting out too soon on the ones that do work.
 
I trade economic releases for interest rate and stock index futures. I subscribe to CSFB, DB, MSDW, and Stone&McCarthy Research Services, so I have a good idea about how the news will affect the market. I have a Bloomberg and Telerate for the releases.

Indices tend to react more AT FIRST than individual issues for general economic releases.

To be able to react to the news to full effect from a flat position, you really have to be an exchange member and have direct market making capabilities. I usually have to reach well into the order book to lift offers or hit bids. If I'm wrong, I get crushed. If I'm right, it's good. I usually won't trade alot of size unless I feel the number is really out of line, and wouldn't be priced into the current market price - that's my job.
 
Originally posted by tempula_99
Hi,

I see a lot of people here trading technically, whether it' s daytrading, scalping or system trading or what else.

Are there people out there trading only off news? You know, ups and downgrades, m&a, earnings, oil stories, breaking news.
More...

I do it all the time. But I'd rather not give out all of the details. Bullets for these situations are a must

Robert
 
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