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johnsmith00710
06-30-2013, 07:19 AM
As a trader you must be thinking that having a perfect strategy is enough to make you make winning trades. But you should always beware of a wild card that lurks out there. Yes, the breaking news. As a trader you should always learn to respect the news.


No one can predict the future. Breaking news is always unexpected. Markets always react wildly to breaking news like some major terrorist attack, assassination of an important political figure, sudden war between two countries in a region important to the world economy like the Middle East due to its oil and things like that. You never know anything can happen anytime.


As a day trader you should know that there are two types of news:


1) Breaking news


2) Scheduled Economic News


Now scheduled economic news can also move the market if it is not what the analysts have been expecting. Anything unexpected that surprises the market is going to make it nervous until such time that the surprise has been impounded into the prices. The most dangerous is the breaking news that makes the markets highly nervous. The impact of the news can be short term or long term.


In case of a scheduled economic news release like the FED announcement, release of GDP figures, release of CPI figures, NFP report or stuff like that the market can react wildly or it maybe that the market does not reacts at all. All depends on the degree of surprise in the news.


As a day trader, you should have the schedule of all the major economic report releases with you when you start your week. This way you know when an economic news release is expected and at what time. It is always better to keep yourself out of the market at those times because you never know how the markets are going to react. Now all the market react to breaking news. However, some traders make news trading their speciality. They look for the times when the market is going to react wildly to some scheduled economic news release. News trading if done correctly can be highly profitable.


The most market moving economic reports now a days are the NFP Report, the Housing Sales figures and FED Announcements. A breaking news can ruin your trading day. So as a day trader, you should learn to always respect the news.


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