Trading on News

From the comment section, in response to the “hard landing, soft landing” post.

visherer said…
I know you’re anti-news Brian and yeah you’re right; price is bottom line. But these reports are there to be exploited and can turn the markets..

today the Australian market went down -20 in the morning session, suddenly retail sales data came out reassuring investors about the economic strength, this turned the markets around and we finished up +10.

I exploited it by buying a sensitive share on suppport $25.60, it then rallied to $26.10.. i’ve done this countless times and its just free money to me..

but the point is if you ignore news you’re ignoring opportunities! News is there for exploiting.

Visherer,
I am of the belief that “the market knows all” and that “news and surprises follow the direction of the trend” and short term moves against the primary trend will usually fail. I do belive that news is a catalyst for movement and that it is important to know when the news is being released, but I only look at headlines, it is very rare that I will read an entire story. It is the reaction of the market to the news that I am interested in, not the opinion of someone who wrote an article and I am definitely not important enough to the market for my opinion about news to matter. Anyway, the important thing is “does it work for you” are you making money with this approach? I cannot say if someones approach is right or wrong, only the market can make that judgement, the market knows all….