Trading stocks on news

[vlad79]

Hi folks!
I tried to trade stocks on related news several times in the past.
But every time i was buying on the top and selling on the bottom.
I sibscribed to a different news services, chat rooms to be in first rows of buyers or sellers. But all was useless!
So i want to start a discussion and listen your opinions about this type of trading. Anyone has a success trading stocks on news?
Thanks for you opinions.
Good trading to all!

 

[candletrader]

News trading can be made a viable part of your trading if you bear a few things in mind:
1) subscribe to several real-time wires at once. Ideally, get an integrated news package and customize your story filter using keywords, cos its difficult to read every single story during the day... if you have a Bloomberg terminal, thats all you need... if you don't want to spend money on a Bloomberg, then check out http://www.newsware.com which is not too bad..
2) you can only learn from experience which stories are big and will lead to an intraday spike in price... you will probably need to papertrade news trading for a couple of months till you get it...
3) learn to execute instantaneously and pay the offer or even more, if you want in... remember that you are up against guys who have been at this game for years...
4) very importantly, I have found that news trading only works for me on bullish days... if the underlying market aint strong, I noticed that the tendency for euphoric intraday price bursts on hot news is mitigated
5) I have found that playing bad news shorts is tough, cos getting filled on an uptick before the parabolic dump is well underway is much tougher than paying up on a good news burst... so I keep bad news keywords out of my filters...
6) for variety, you may not wanna become a specialist news trader... you may wanna news trade certain times of the day, or only on bullish days where, in addition you could take positions in ETFs or eminis or do sector plays... if you are part of a "trading gang" (see my website), maybe you could rotate styles amongst you during the week...

Just my 2 cents... different strokes for different folks...