I'm not going to suggest that you all trade the news BUT....did Thursday's rise "price in" Fridays payroll number? Hardly.
(1) The news should not ALWAYS be tuned out, and (2) yes, it's best to trade "purely technically as you can". (Unfortunately this leaves the trader with subjective evaluation about which news to pay attention to and "degree of technical only" decisions. Sorry, I don't have better and more pure answer.) Friday's news-induced decline was could have been caught by everyone with the proper mind-set. That is, "some indices had rallied to resistance and were vulnerable to a negative surprise." Shorting on the "news" (5.5% unemployment number) was perfectly logical. It was also logical on a risk-reward basis to short Thursday... hoping for a negative surprise to take advantage of the vulnerable setup. I didn't do that, but a friend of mine did... by Friday PM, he was looking like a clever smarty-pants.
One thing I have learned that news provide reasons to argue for my case, for my bad trade. By removing news, I won't have any reasons to argue for my case (my bad trade), and therefore it make me easier to get out from a bad trade. Too often news work to contradict the price action, to counter our success; meaning that news provide us a tool to support our wrong decision.
lol that's a ridiculous statment. i do just fine trading news related stuff. when you can trade news related plays then it actually means you have a clue about what is going on and why it is happening.
I never trade the news but I am very aware of when news and reports, that the market feels are relative in importance, come out. I either close out or stand aside for 3 minutes plus or minus one of these reports.
Why watch the news? Just look at volume 5sec before/after news announcement. You will either see price drifting, or see the DOM go empty(lmao). When the DOM goes empty, you know for sure a big swing is coming up, so just put up a bracket order. Just watch your Tick chart on 1tick spread, and see what's cooking. You will see the news flash..On your freaking Tick chart! Now go tell this to Jim Cramer! He would laugh so hard, because his minds does not get that part. Markets= Biggest online multi player game!
News fuels the momentum of the market and the charts which they are being viewed. News does not drive a market in a direction it wasn't already heading.
I concur. One absolutely needs to be aware of new reports, especially if Intraday trading. News reports will fuel markets more radically on the short term basis than long term but still never drive them in an extended direction that is counter to the direction prior to the news report.