Do you use news to day trade?
When important financial news is released, usually the prices of financial commodities (stocks, bonds, currencies, etc.) start fluctuating more than they normally do.
This increase in volatility makes it more difficult to day trade - since prices move more chaotically and stops are taken out more easily. For that reason, it is usually better to avoid taking a position right before or during an important news or economic release. What you should try to avoid is the urge to buy or sell based on your interpretation of the news. Just because you think a specific news or event is positive for the price of a stock or currency, it doesn't mean that the price will go up. If the news is significant, the price will go up or down - it doesn't matter which way it goes. You can react to whatever direction it decides to head in.
I reiterate: don't day trade based on news. Be aware of when the news or economic report will be released and then be careful during that time. Don't take a position into an announcement hoping that it will move the price in the direction you want. That is gambling, not day trading.
(update: I've actually met a few successful news traders after I initially wrote this page - but they are few. News trading should only be contemplated by extremely experienced day traders)
Back to trading education.
What others are saying:
AWESOME SITE! I cannot tell you how much your site has helped me with my
trading. And I'm glad I found you right about when I first started...I
have done very well so far and large part of that success is due
to your suggestions... Dean P. Read More...
No testimonial used on this website is indicative of future results. Past results are not indicative of future results. The individuals quoted in the testimonials used were not paid to be quoted. The testimonials used on this website are unsolicited and are non-representative of all visitors.
