If sometime Sunday evening ...... - CDC announces they've just discovered thousands of Coronavirus infections, or - Powell is caught saying rate hikes, or large balance sheet reductions, might be appropriate, or - China announces it will back out of the 1st agreement and discontinue talks on the 2nd ...... I believe markets would drop on Monday. Are you saying that those news events wouldn't affect markets ?
It's posts like his, who is apparently a long-time trader, that make me give up on ever getting advice from here. Due to how obviously wrong his post was.
Growth has been slowing for many quarters now. That is the real news if you want to call it that. CoronaV is just the excuse given by the lazy media.
Lots of good advice here. But the trick is to look for confirmation from posters with a history of offering useful advice.
I am using a swing trading system. My winners are bigger than my loosers. I have had profitable days with only 33% right calls.
Both lead to tradable circumstances on different time frames. Short term, you can literally see market reacting on virus headlines as they are released. Long term, slowing growth is indeed what matters and will cause this bull market to roll over (the most pessimistic scenarios for coronavirus entail noticeably lower growth though, but those are tails).
Suppose they do affect the markets. How does knowing the news catalyst provide you any information that will allow you to profit from it? I don't think anyone is saying news doesn't affect the market from time to time. But knowing the news does nothing for you. I've seen great jobs numbers cause the market to sell off, rally fiercely, and whip a bit at the number and then go into a flat trading range. All you can do is trade the price action. Too many "traders" will sit there fighting the market because it isn't doing what they feel the market should be doing given the news. Well, WTF are they to tell the market what it should and should not do?
If the market initially does opposite to what you expect, it enables you to get in on a counter-trend move with some conviction (but as this requires you to be more right than the initial market reaction it is to be used sparingly). If the market goes the right way, it enables you to have some conviction the trend will eventually continue. In general, the market moves mostly on unexpected events or data points with surprises compared to expectations. Most scheduled data releases just lead to a small untradable (unless you are HFT or maybe an automated scalper) blip for this reason. If you can trade the same move using TA or whatever, great. Trading on news only means passing on most moves in the market (because usually there is no news around to explain them) and also most news (because most news are untradable as explained above).
You could also say that institutions wanted an excuse to sell so blamed the news As always, you must combine fundamental and technical to trade well.
There are zero cooky cutter rules or certainties in trading you can take to the bank. But imo, largely, news follows the market. The media is geared that way in attempting to take credit for moving the markets. 95% (my guess) of trading moves are from algo influence. News once in a while but rarely is the propellant. News events like coronavirus may accentuate a market move later down the track, ie, coronavirus is a lagging propellant.