Maybe, maybe not. Markets can act erratically to news and you have to change your risk management into these catalysts...I would definately want to know if something I'm trading has the potential for a large move because of some news.
No, many times companies with news will have the best moves. Because there is real instituational order flow in these names. You just want to be aware of these events so you can plan your trading around them. When you know some news has been released or will be released into a stock it gives a much better perspective on the price action.
I might be generalizing way too much here, but I wonder if the insiders direct the price for you early the day and as a trader you should follow their early movements, or if by the time you attempt to follow their movements it's too late. I'm not sure how often this sets up an unexpected boom or crash if it goes the opposite way of how it looks like the insiders are directing it.
that's depends in what you are doing(or planning to do) for example if you playing market neutral games,pairs etc-then you don't want to touch stock with news. opposite maybe true for directional trader.. KISS. but no one in his right mind would use tv or newspaper for day trading. maybe IBD,to play with their lists.
actually you have asked a good question, does news matter? The answer is it depends. Stocks move on news but sometimes they go the opposite the logical conclusion. LVS is expected to earn .40 per share they come out with .42 per share and the stock drops a few bucks, there is something on the street called a whisper number where people expected a higher number. In my own opinion, I think the mkt will key off a few stories. I use google reader and will look for several sources talking about the same subject. For example Jamie Dimon testifying yesterday was the news, 5,000 news stories, endless discussion on the topic. Not sure if that would help you with trading an individual name. I think what the other posters are saying is that you can trade based of other things like fundamental or technical analysis, astrology, cycle analysis, etc. You should know that the greek elections coming up are a hot ticket, the reaction will be interesting. http://www.reuters.com/article/2012/06/14/us-markets-global-idUSBRE8520GN20120614 "The euro rose against the dollar and U.S. stocks also gained on Thursday on rising hopes that the Greek elections this weekend will not put Greece on a path to exit the euro, even as the yield on Spain's 10-year bond held hear historic highs. " truth or bunk?
Totally agree, if you are doing any type of stat arb or mean reversion you dont want to touch news driven stocks!
Wouldn't you also want to get much more profit, if your chart told you to do so??? That's right, "markets can act erratically to news", so get in early and stay late, if things move your way. Or, take your profit up until the release. Remember this: The only truth in the market is price.
Yea...but let me ask you this....if you did look at any news how would you be able to do any of the above? How would you know to take profit into a release or even get in early and stay late if you didnt know the catalyst was going to be present LOL
Has it really? Or, is the book just telling you things you never considered, without regard as to whether what you are "learning" is relevant to making a buck in the market? Strictly studying charts is overwhelming! You got that part exactly correct. That's why you can't pick up a book and instantly become a trader. You have to understand price, not what some writer puts in a book. This stuff takes years. Also, consider this: If a guy who writes a book could trade, why in the hay would he be writing a book about trading??? Books aren't going to tell you what you need to know and neither are other traders. People who know how to trade aren't going to just hand you exactly what you need to know for trading. Trust yourself. Trust price. Remember: The only truth in the market is price.