There are many traders who trade on news. Some people believe in using breaking news as an arbitrage opportunity. They buy on hearing rumors and sell when the rumors prove to be true. This seeks to exploit the difference in investor perception and sentiment before and after the breaking news.

Others try to pick exact market tops and bottoms using news headlines. The more irrationally exuberant or hopelessly depressed the news, the more likely the market is at a turning point. This attempts to benefit from investor greed and panic at market turning points. It is a type of contrarian investing.

Yet another way to trade on news, especially if the news is insufficiently groundbreaking, is to scan them for continuation patterns. An uptrend can ignore negative news with rising prices, while a downtrend can ignore positive news with falling prices. These are good continuation patterns for trend traders.

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6 Responses to News

  1. andrei says:

    100% Lc/lcb…..all in:))

  2. tony says:

    I pick my stocks by reading the news and blogs like this. No technical or fundamental analysis whatsoever as I’m too busy to do that anyway. As to how much I actually profited from this lazy “technique”… Well, I’ll find out soon enough! Cheers and hope you continue writing insightful posts for small time traders such as myself. πŸ™‚

  3. noob says:

    well well… perfect to have a good mix fundie and techie skills. riding the (tidal) wave is fine – basta profit! I learned that there are also a lot of fluke that hypes selected stocks at the expense of others. at the end of the day, we’re all responsible for our actions.

  4. andrei says:

    LC LCB

  5. noob says:

    hahaha. buy LC so those who buy on top can sell.
    let me go hahaha again. happy month of septem-bear! πŸ™‚

    • noob says:

      apologies for the bear language: it’s “buy LC. so those who bought* (below or at the top) can sell.” do you think mining run is over? news say it’s not. but how far from it, we don’t know. goodluck!

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