Does Anyone Ignore News Completely?

[Money Trust]

I think I've finally reached the point to where I think the news is no longer worth keeping up with. Don't get me wrong, I don't use the news to make trade decisions. I just like to be informed. But for the past few months, after refining my system and gaining some pretty good returns, I noticed something. That something that I noticed is that....what the price action traders said about the markets is true! They said that fundamental news almost always reflects itself in the prices before ever reaching the public and a few recent trades of mine have proven that to be the case.

For instance, I've been short the Euro since the end of October based purely on price action, and yesterday they announced an interest rates cut on the Euro which is of course a bearish sign. I've also been long USD futures since late October based on nothing more than price action and yesterday, they announced a bullish GDP report. During the time of the govt shutdown and everyone was worried about a potential default, I said there'd be no default because the price action on 10 and 30 year treasuries indicated a bullish move was near, so I went long the 10-year and sure enough there was a strong bullish move BEFORE the ending of the shutdown was announced. For proof that I made that call, check out this screen shot: http://youngandopulent.com/wp-content/uploads/2013/10/futures.jpg

Anyways....I'm like "to hell with the news!" Does anyone else trade this way? Again, I like to be informed on what's going on and also because I wouldn't want to be taken by surprise but I guess that's more of a day trader's concern. What do you think?

 

[niko]

Why do you want to know about the news? Planning on going to a cocktail and have some interesting conversation? If you are trading, perhaps the newspaper is not the place to be spending your working hours.

 

[Redneck]

Quote from STC Capital:

Does anyone else trade this way?

Yes..., I am only aware of the dates & times various reports / announcements are due out

RN

 

[cmb]

I never use the news. only because I dont subscribe to cable TV in my house. I planned on getting cable after I got off the demo, but I'm doing well in my system and I dont feel like watching the news is going to help me.

I use price action/ candle setups/support and resistence and lvl 2 so I dont know if watching news will help at all, probably distract me a little bit.

 

[blah12345678]

A lot of us, until we're fully confident of our methods (OP's use of price action in this case), have a need for additional sources of confirmation to make sure we're not misreading the situation and opening ourselves up to a very expensive mistake.

I've noticed in the last few weeks the tendency of the market and news to trade in the eventual direction of the post-announcement move 2 days prior to the announcement, then see it shift 180 the day before the announcement.

Seems the bigger players know what the announcement is going to be, and work to catch the smaller players leaning the wrong way...

Lure them in 2 days out, then cast doubt and flush them out the day beforehand, leaving them on the sidelines - used, abused, and confused - when the announcement hits...

 

[maler]

Some news are smart money looking for an exit,
others are genuine and yet to be priced in.
In time it gets easier to sort them out.

 

[stock777]

people claim to trade without news but those same people probably go broke and lose their internet feed before they can say goodbye.

 

[actionzip54]

Quote from stock777:

people claim to trade without news but those same people probably go broke and lose their internet feed before they can say goodbye.

So do most people who trade with the news....


So what's your point?

 

[cmb]

Quote from stock777:

people claim to trade without news but those same people probably go broke and lose their internet feed before they can say goodbye.

well thats why you enter a stop order that will protect your order 99 percent of the time.

Not sure if my stop would have worked during the flash crash, but 99% of the time my stop will exit me near me desired location.

another thought about the flash crash is that I probably would not have been in the market. Or since it was a down day in the market before the dow plunged 700 in 3 minutes, I would have been in a short position which wouldnt have mattered very much. I doubt any of my long positions would have triggered.

In that case watching CNBC would help me understand WTF was happenning LOL

 

[piezoe]

What Maler said is correct. With experience you will learn what news to discount (most of it) and what to pay attention too. For example Draghi's announcement wed pre-open, pay attention. Headlines claiming to explain why the market went up or down day to day, ignore. Analyst up- downgrades, pay attention because no matter how illogical, they will move price at least temporarily. Use your own judgement on whether the analyst makes sense. When they don't make sense, which is quite often, or they use words like "maybe" , "possibly", "could be" they are likely being used as pawns to manipulate a stock up or down. Down because the firm for whom the analyst works has shorted it, or because they want to accumulate it. Up because the firm has bought it, or because they want to dump it. Thus the big print, classic headline in Barron's telling everyone what a great buy GM is just weeks before they had to be rescued. That was so some major players could get out as the stock bounced. Use your common sense, if you were holding GM short, and you should have been, you'd either have to cover, knowing the bounce was coming, and get back in at a higher price, or have faith in your own judgement and hold through the bounce.

In general, Wall street brokers and analysts are either out and out criminals, or borderline criminals operating as close to the legal limits as they think they can get by with. Keep that in mind when the source of your "news" is Wall Street, or mainstream media, which gets their news ticker from Wall Street. When a CEO, e.g., Tesla, comes out and says shorts will be sorry, or things couldn't not be more wonderful, when common sense tells you a prudent person would have some concerns, it is time to take note. When a company is known to be on the ropes, and they are on their third CFO in 9 months, and the CEO gives a glowing report of how well things are going, sit up and take notice. All CEOs lie even when they don't have to. It is a major qualification for the job.