Hey guys, I've been daytrading for almost 3 months now. I'm not a professionnal or anything. This is my opinion. So, I see lots of people talking about technicals on how they draw on the chart to analyse the instrument, people also use fundamentals to invest in high debt companies or whatever. My point is, few people talk about ''chasing news'' in general. Basically, my approach is I try to daytrade according to news atm. I found that the correlation is enormous. Does anyone else does that? I still use things like RSI, MAs, Volume but these are just for my entry/exits. For example, look at CGC news, they all correlate with high upswings, My question sounds specific but really, i'm just trying to get some opinions on how people operate when comes time to choose a winner.
Not familiar with the term but I'd say the correlation is usually on point, it goes by logic too. If X company gets Y license in an important area and you get the information on a short delay. I think it gives you better chance of success. ** Also, as a new trader like myself, it gives you something concrete to hold on when facing decisions.
You forgot to pre-amble your question with whether your 3 months of day-trading has been successful or not. If so, do not ask any questions. If you wish to make more money doing it, then do exactly what you are doing, but just increase your position size. The more ideas you get in your head from outside sources, the more it will mess up the good thing you have going. Only start to ask questions when things are going terribly wrong for you.
It's irrelevant to me, i'm up 2% right now but I started and lost 25% in a month. I'm just trying to get more ideas as i'm new. My strategy will evolve for sure.
You didn't answer the question. You are up 2% now, lost 25% in a month. Does that mean you are up 2% over 3 months? If so, then yes, now is a good time to ask questions.
Ok, my question is ; Do you use/consider news to trade/analyse instruments? ** To me, as I usually trade intraday, I look up for any possible news affecting stocks. I then, setup an entry/exits with technicals and the volume.
Well, your question is very generalized. I trade futures, but based on your writings, you seem to be into outright stocks. They are two different animals, by a wide margin. (All times shown on charts or typed are Eastern Time) For example, here's today NQ action, from the start of the middle-of-the-day sloppy-choppy crap. The chart may not make sense to you, so I will explain briefly. Time stamps are on the bottom, and price is on the right. Bars are a form of UniRenko. I drew a couple of simple trend-line channels there for you, TA 101, right? So basically, if you were watching this nightmare of 15-point chop from 11 AM to 2:30 PM and had drawn that trend channel, you'd expect a break in either direction, and rightly so. But what TA in the world could have caused that pop at 2:38PM? So you start frantically drawing your trend channel on the upswing. By the time 2:48 PM comes wound you go, *whew*, K, now what? So how do you decide what to do based on THAT TA? THERE IS NO TA IN THE WORLD THAT COULD HAVE PREDICTED, PREVENTED, HELPED, HURT, AFFECTED IN ANY WAY OR FASHION, IN THE FUTURES WORLD, WHAT THOSE CHANNELS MEAN, ARE, OR REPRESENT. The sudden nearly 60 point rise and then 50 point collapse in the NQ in the space of 20 minutes is not TA, it is FA. It was a knee-jerk to the report of the White House nulling trade tariffs. Now compare that action on NQ (or ES or YM) with any particular stocks you trade, and see if your TA on the stocks you follow contraindicate the news on those particular stocks. Remember, I trade futures, not individual outright stocks. In futures, I am finding that I use TA to guide my decisions on where and when to enter, but it is finely balanced with FA for follow-through. But in the end, FA trumps all. So all those people who say "If you trade the news you lose?" To them I pee on their trading graves. Ergo, I agree with @Pekelo lol
If I cannot quantify my edge I do not trade it. I look at the news briefly to foresee any black swans (like the FOMC). Other than, the news is worthless on a day-to-day basis.
Now Fedex, any dipstick even with bird crap in his eyes, can see that after the BO of the range there was FT after the first PB so going long was the tactic to use. The channel is tight and steep. Stay long or add on pb’s. Now Bull channels should be viewed as bear flags with probabilty favoring a BO south. So, at the top we see a bigger Pb that becomes a more than 20 bar TR. Triple top that becomes a Lower High major trend reversal after 3 failed attempts to continue the bull channel. After 3 attempts the market usually tries the other way. In this case south. Plus the entire tight bull channel is a wedge top. Wedge top followed by 20 + bar range ..well...odds favor a reversal south out of the bull channel. So short after getting a SERIES of bear bars that break south of that range at the top. Indicates further weakness. If still in doubt of reversal south after the range BO at the top then wait for FT. Wait for first pb then continuation of trip south and short then. It is what it is...news or no news.. a trader trades what is on the chart. It doesn’t matter what or who moved the price.