The impact of NEWS and ECONOMIC INDICATORS

Updated: Feb 20

There is always a good explanation for falling and rising markets. Sooner than later every trader will see his #perfect #setup going into the opposite direction at positive news and wonder how this could really happen.





Is Good News - Good News or may it also be Bad News? Vice versa?






The honest answer is in the crowd dynamics and probabilities. The wrong answer can be quite often found in comments and articles of analysts and journalists on a direction of a specific underlying. This is probably one of some reasons why retail traders tend to sell on Mondays after spending time reading articles at weekends. In a simplified reality there is one crowd which is driven by forecasts, estimates and growth fantasies and then there is the other crowd that "buys the rumor and sells the news". Demand / Supply dynamics will then define direction.

There is no #edge in #trading only based on information which you will find in the news. Your #emotions will hinder you to make the right decision. Remember, a mass of other traders received the same information before you did and positioned themselves accordingly. Furthermore you are manipulated and biased. The #manipulation I am referring to comes from our brain which seeks for reward on confirmation... This is one of several reasons why discipline and systems make #traders #successful.


I had to work on that as well and never will stop working. This website and its dashboards is one key result of more then a decade of (partly painful) learning. The actual data shows the truth and if you analyse its absolute values, its direction, its dynamics and ratios you can leverage that "edge" to significantly increase the #probability of #success of your #trading.

#Newstrading works, this is proven, however it is a discipline on its own. There is no chance to succeed long term without the right specific #knowhow, #tools and #strategies. Managing emotions on news is key for long term success.

Sources and interesting reads:

When Good News is Bad for Stocks

Financial news predicts stock market volatility better than close price

Stock Declines Despite Good News

The Monday Effect

Trading Psychology

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