Trading the news is damned hard unless you have an ultra fast news feed and lightening quick trading platform. My advice to anyone trying to trade the news is not to bother because there will always be someone quicker than you.
News news news: how can you become knowledgeable in trading the news?
However, knowing what news items are coming up and understanding how the market reacts to it can be very useful. With my Forex trades I’ll generally close my positions before a major announcement. For minor announcements I’ll usually let my positions ride.
For my trades in indices such as the S&P 500 which are generally longer term, reading the news and watching the market reaction gives me a good feel for the mood of the market. If some bad news comes out and the market hardly wavers or even rallies, it’s a sign that the bulls are in control.
Some sites such as Bloomberg give you the headlines, but there are lots of other critical sites and blogs that pick apart any headlines. I’ve noticed that if the headline sticks and markets rally on the back of it, it’s best not to fight the tape straight away. Generally those clever people who pick apart government and company spin are proven right, but you have to give it some time for the market to settle.
Many people such as Meredith Whitney were right on the money with their analysis of banks, but the crowd didn’t want to listen until the market started to turn.
You can be proven right, but lose money because your timing was out by a few days.
So without further ado, here’s some recommended sites for live news alerts and a list of the places I go to for more detailed analysis.
Live news feeds:
Google is a great news aggregator meaning you don’t need to scan tons of different websites looking for the news you want to see. If you are looking for stories about a stock like BP or a currency like the Yen, simply type that into Google and search by date for the most recent stories.
If you set up a Google account you can set Google news as your home page and personalise the news you see there. If you want stories about the euro, you can set it so the very latest news stories appear on your home page. Neat stuff and great of those who don’t have much time to read, you can just scan the headlines.
A must if you want to know what news is coming up, what the expectations are and what the number was time.
Pretty good for instant reactions to major news events. However, be wary that they often republish stories from external news stories. Useful for instant reactions, but http://ransquawk.com/
If you sign up for the free package, you can listen to their slightly delayed squawk box which involves someone reading out the news as it happens. Useful service that I often have on in the background during a busy day.
http://www.forexhound.com/ & http://www.fxstreet.com/
Both sites are a useful roundup of the latest Forex commentary.
Intelligent commentary:
These sites may not give you instant news, but I read most of them daily to get a feel for what’s going on behind the headlines.
http://www.ft.com/home/uk – Bit of a cliche, but still an excellent site with some hard hitting articles.
http://ftalphaville.ft.com/ – Excellent blog from the FT with some cutting articles. Sometimes can be a bit technical but it provides an excellent overview of the bigger picture.
http://www.ritholtz.com/blog/ – US centric, but takes a very sceptical view of the headlines and is often proven right.
http://blogs.barrons.com/stockstowatchtoday/ – Probably one of the best summaries of the action on US markets. I like reading this in the morning to get a feel for what happened the previous day.
I hope this helps folks
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My Trades
Under water with an S&P 500 short from last week. I’ll give it a little longer, but it’s looking like one of those occasions where it would be stupid to continue to fight the tape. My Forex trades went well last week, but it’s been quiet over the last couple of days with few trades coming through in the hours that I’ve been trading. I’m working on some additional mini systems that will see me through the quiet periods. Update to come soon.
This week’s hot trading buttons
This week’s top tier economic announcements start with today’s Canadian rate statement followed by Fed Chairman Bernanke’s testimony at 3 today and tomorrow. Tomorrow we get the minutes from the last MPC meeting and Thursday we have UK retail sales as well as US existing home sales. Friday finishes off a relatively busy week with UK GDP figures.
Throughout the week, we’ve major US companies such as Apple releasing their latest earnings numbers. So markets could be a little jittery from around 1.00 each day as the numbers come in.
Trading wisdom
“Don’t think about what the market’s going to do; you have absolutely no control over that. Think about what you’re going to do if it gets there.” – William Eckhardt
