I read somewhere some traders are taking this approach, days like today and yesterday are the only days we see movement anymore in the markets when news is released. Plenty more opportunities to be had only when news is released, sad. Thanks FED.... Anyone else apply this line of reasoning to there strategy?
I only trade when there's some news about something... it's called a catalyst, if perceived as positive by the market prices go up, if negative they go down. The catalyst changes the market sentiment which changes the supply/demand of a security, which result in price moves. Most common news event traded in stocks is the quarterly earnings report; lots of people (and machines) trade them, before and after the report comes out.
Of the economic indicators probably the most traded are the jobs numbers (employment situation); and the FOMC meeting/Fed policy releases.
i disagree here. news is where i tend to be handicapped. chances are there someone knows the news before, plus algorithms react much faster. Different story 30 mins after news though.
I should have been more clear, I wasn't talking about taking a trade OFF of the news/data, but trading on days WITH news. As they tend to have a nice range and volume, more opportunities to get long/short.
Most popular trading instruments have news most trading days in reference to futures and forex. Therefore, what's the difference between trading days like yesterday and today with news and increasing volatility versus other trading days with news and decreasing volatility versus trading days with no news. If you can figure out that answer, you'll increase your chances of becoming a consistently profitable trader regardless to the news events and regardless to the overall volatility. Just as important, you'll learn when to be looking for the best trade opportunities and when to stay away from the markets when opportunities are low during certain durations of the trading day. P.S. If you're only thinking about the FED while ignoring ECB, IMF and others...you're already 10 steps behind the market if news is important to you.