Thursday, June 02, 2005
Are you a news hound?
Just having some thoughts here.
Do you do lots of news research when youre trading?
Do you try to figure out what the numbers will be?
Do you ask others opinions on how the market will react to news?
If you do, then i have some advice for you
Forget it - its all bollocks!
I can understand what youre thinking. News is what moves the markets - news is what starts and finishes trends and if i want to be a strong trader then i need to learn fundamentals.
Well, wake up and smell the coffee!!
News does NOT move the markets - the only thing that does move the markets in this crazy world is EMOTION.
Think about it - if news moved the markets then when the news was good the dollar would rise and when its bad it would fall.
dont always happen like that though does it.
How many times have you seen good news for the USD only to see the price go sailing down?
that's because all market movement is made by the emotions of those present and at that time people are scared shitless of either losing big time or missing the boat.
Analysts are paid hundreds of thousands to predict what will happen with news - and even they get it wrong 50% of the time so what chance have we got?
One analyst will say its gonna crash whilst another says go long.
At the end of the day all we can do is follow the market - trade what you see is a familiar cry among traders yet every day in the chat rooms i hear people ask - "whats your opinion on NFP this week" or "how will the market take a drop in those numbers?"
The problem here is that asking the question and getting an answer puts a bias on your trading - if evryone else thinks long then hell, just cos the chart is screaming short you wont take it.
Next time you start asking or listening to opinion on forthcoming news - just remember this ...
ITS ALL BOLLOCKS ANYWAY!!