Does news really move the market?
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    Rookie Azis Muslim's Avatar
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    Lightbulb Does news really move the market?

    Hello

    I want to make brief presentation about this topic. This really bothers me at first time I watched a video of trading psychology but later I realized trading the news do not give me more than 50% of winning ratio. I also get confused by news on market because at some points, market did not move in correct direction along with the news result. Moreover, many rumors spread all over internet which one analyst expert said this while others might said that.

    While I watched the learning video of trading psychology, there I learned all about the aspects of trading which need to do and need to avoid while we trade. One of the biggest thing we must avoid is the news. You know why? It is because news actually hunting retailer’s stop loss while creating big space of movements which can only be analyzed better with technical analysis. It has come to my attention that fundamental analysis is good but can not be used as main consideration for market entries. Not for me.

    Here are some examples about news trading. Make some reviews back on GBPUSD pair on date March 16th 2017, it was FOMC news and Fed rate increased from <0.75% to <1.00% as expected. But unfortunately, market was going up instead of down by following the news. How could market did that? Here is the answer. Technically we could identify it with the help of trend line. Check the screenshots below:


    Follow the instructions on screenshot above and see market was moved up instead of down because price touched lower trend line and previous resistance levels which that moment became a support for that price movement. So according to this, what is your conclusion about news? Does it really give us good market entry or technical analysis is working better here?

    I am not with the people who hate fundamental analysis, for me I just avoid trading with it anymore because I want to focus only with my technical strategy. I am writing this based on the facts I saw on market, not from what I think about it. It took a while for me and probably for you guys to realize the same thing. Try to avoid news and make your trading system as simple as possible. The mindset is pretty easy to build, if you really think forex trading is a difficult business to do, then your brain will automatically process it and decrease your ability to learn things faster and easier.

    Change your mindset, focus on your technical analysis, and keep things simple.

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    Rookie layigold's Avatar
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    Market reacts to news and rumors a lot and that is why most good technical set ups do not work out at times . The market sentiment is such that can change at any time because of either the news ( be economic or political) as well as the the rumor which eventually might not come to reality. There are times market moves rapidly and the reason for such move is what you can easily see on the calendar and that is why a forex trader must take times to protect is account because anything can just happen in forex.

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    Rookie Azis Muslim's Avatar
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    Quote Originally Posted by layigold View Post
    Market reacts to news and rumors a lot and that is why most good technical set ups do not work out at times . The market sentiment is such that can change at any time because of either the news ( be economic or political) as well as the the rumor which eventually might not come to reality. There are times market moves rapidly and the reason for such move is what you can easily see on the calendar and that is why a forex trader must take times to protect is account because anything can just happen in forex.
    [lang=id]Guess we have different opinion about it and that is fine because each of us knows how to trade and how to react when there are news about to release. Understanding it now makes me more cautious because I must focus on my technical analysis first before reading and understand the news both with actual data and rumors which has spread from many sides. I still fixed with an answer that news not really moves the market.[/lang]

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    Rookie Lyon's Avatar
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    I think I have made some point regarding thing here or some where else, the news trading works in a way that the bigger boys are looking up to the release to take decisions in the market. Not as if the news moves the market on it's own, but the big boys are the one that trades in reaction to the news because it tells if an economy will be fine or poor.

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    Pro Obaforex's Avatar
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    Quote Originally Posted by Azis Muslim View Post
    Here are some examples about news trading. Make some reviews back on GBPUSD pair on date March 16th 2017, it was FOMC news and Fed rate increased from <0.75% to <1.00% as expected. But unfortunately, market was going up instead of down by following the news. How could market did that? Here is the answer. Technically we could identify it with the help of trend line. Check the screenshots below:
    I think an important point that traders most understand is that for a news to drive market it must posses some element of surprise, either by been better than expectation or worse than expected. A news such as Fed rate coming in as expected could be bad because already the big market players might have traded it already ahead of the release and since their is no surprise they wont trade it again. So mostly in such situations technical analysis is usually the judge of which direction market will go

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    Rookie Lyon's Avatar
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    Traders are buying and selling in the market in accordance to the economy status as well, so what this means is that as much as traders are in the market and positive political or economy news arises, then the big boys that has huge money will take decision and that will affect the price. That is how I understand the news moves the market through the reaction of traders.

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  7. #7
    Rookie Azis Muslim's Avatar
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    Quote Originally Posted by Obaforex View Post
    I think an important point that traders most understand is that for a news to drive market it must posses some element of surprise, either by been better than expectation or worse than expected. A news such as Fed rate coming in as expected could be bad because already the big market players might have traded it already ahead of the release and since their is no surprise they wont trade it again. So mostly in such situations technical analysis is usually the judge of which direction market will go
    [lang=id]I think this is what I still have not understand about news and how they really work with market because I usually trade with technical analysis and never have any chance to learn about fundamental analysis or even understand how to trade properly with them. All I know about news is through economic calendar and your opinion quite sensible to take for me so now I understand, that is how news really affect the market.[/lang]

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    The market sentiment is such that can change at any time because of the news, Keep in mind that market reacts to news and rumors a lot and that is why most good technical set ups do not work, I must focus on my technical analysis first before reading and understand the news both with actual data and rumors which has spread from many sides and I am making good amount while trading with this method.

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    Rookie Lyon's Avatar
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    Quote Originally Posted by Azis Muslim View Post
    [lang=id]I think this is what I still have not understand about news and how they really work with market because I usually trade with technical analysis and never have any chance to learn about fundamental analysis or even understand how to trade properly with them. All I know about news is through economic calendar and your opinion quite sensible to take for me so now I understand, that is how news really affect the market.[/lang]
    The news is what the big boys react to, like the are more of economist than technical trader like most of us. The big boys look at the economy situation of a given country and they get to make analysis and get to know the situation of the country on the long term, because if there is a good economy growth, then it means that the currency will appreciate in price.

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    Rookie Azis Muslim's Avatar
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    [lang=id]
    Quote Originally Posted by Lyon View Post
    The news is what the big boys react to, like the are more of economist than technical trader like most of us. The big boys look at the economy situation of a given country and they get to make analysis and get to know the situation of the country on the long term, because if there is a good economy growth, then it means that the currency will appreciate in price.
    Mostly says about this too but I do not believe that in full just because many people said that to me. From my simple realization about market and news, I think those big swings created during news release is just a temporary reaction from big traders to confuse retailers about market real trend. It also hunts our stops very easy and only traders who can think quick enough could get in and out with profits through news. I am not a good and quick thinker so I do not trade news very well.[/lang]

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