My approach to any rapid abnormal unscheduled/unexpected behaviour now - If it's going against me fast pull all the positions immediately, if it is in my favour wait and find out if the move is real or another of those funny spikes caused by erroneous orders - take no new positions until I've established what is happening - keeps me out of trouble... Best Natalie
I used to be a news stocktrader in 2000. Since then people have wised up. Or maybe the unwise have given up
I gotta disagree a little Baruch. Depends on what the news is. I believe you're making a blanket overstatement.
I also include economic reports in the news. And I speak about index and forex markets - not individual stocks. P.S. OK, you can trade without knowing the news - but only if you are a scalper.
http://www.efficientfrontier.com/ef/102/taleb.htm "The key, to a successful investing career is not just buy and hold, but buy and forget, something not easily done in our information-saturated society. Taleb's solution involves forcibly ignoring the news (and its frequent pricing). "
I'm just curious to know: Say if one as a minority has got a piece of news with (if possible) 100% accuracy without missing any possible details, but how can (s)he ensure her/his personal interpretation and prediction about the market dynamics IS 100% accurate when compared to the mojority of crowd who might be even wrong in absolute terms.
After working with hundreds of traders, I can tell you that while news is not absolutely essential, the majority of successful traders either use the news or are aware of any news that affect their stocks. I can't tell you how many traders I've seen where a stock was going against them, and they kept adding to their position. I say to them "Didn't you hear the news in your stock? Why would you want to keep trading it in that direction with that kind of news out?" and they say "What news?" as their loss increases. I also know traders that spend thousands every month on expensive news services... bloomberg, reuters, etc. But they make 10 times that in profit and they say there is no way they could do that without these news services. And, I know traders who do well playing the news of the day off of the free news services that are available on the internet. I don't think expensive services are for everyone, but I think you should at least be aware of the news in any stocks your trading and for the most part, you can get that off various sites like yahoo.
My opinion is that for stocks news can be necessary, but for indices no. That's one of the reason I prefer indices.