Trade the News or Fade the News? Part 1 of 3

07/27/2017 2:55 am EST

Focus: STRATEGIES

Jake Bernstein

Publisher, The Jake Bernstein Online Weekly Capital Markets Report and Analysis

Given the undeniable fact that the news is here to stay it behooves us as traders and investors to know when, how, or if to respond to the news, asserts veteran trader Jake Bernstein in his new weekly series.


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News:  it’s everywhere! We are surrounded by the news. We can’t get away from it. There is more news today than ever before.

Thanks to the internet, iPads, cell phones, Alexa, Siri and of course newspapers radio and television, we are drowning in news.

The good news about the news is that there is news. The bad news about news is that there is news.

And of course, there’s good news, bad news, snap chat news, Twitter news, weather news, earthquake news, and with the new president of the United States, we have the entrée of fake news.

Whether you believe the news or not, a vast financial empire with far-reaching appendages has been built and is maintained on the back of the news. We have bloggers, tweeters, right-wing news, left-wing news, Al Jazeera news, investor news, Isis news, and so much more.

At any given moment, the news from virtually anywhere in the world can and has impacted the financial markets significantly.

The news can be helpful or hurtful. Given the undeniable fact that the news is here to stay it behooves us as traders and investors to know when, how, or if to respond to the news.

If you are not convinced that news provides numerous trading and investing opportunities every day, spend a few hours watching CNBC and observe how statements, opinions, and recommendations impact the markets immediately based on what “experts” say on the air.

In fact, the pattern of stock responses to expert statements on CNBC is very predictable and has been cited with several examples in my book The Complete Day Trader II (McGraw-Hill).

In this three-part series, I will attempt to provide you with actionable, viable and intelligent methods and procedures for evaluating and using the news to your advantage as a trader.
Here are the topics that I will cover. Understand that in so doing, given the limited amount of space that I have I cannot cover all aspects of the news thoroughly. Virtually any one of the topics below would be fuel for an entire book.

  • How do we differentiate meaningful news from useless news for investment/trading purposes?
  • Buy on bad news selling good news: is it true?
  • Buy the rumor sell the news: good sense or nonsense?
  • How to use earnings related news to your advantage
  • Evaluating how markets react to news
  • News plus timing triggers: some examples
  • The benefits of isolationism
  • And, some random thoughts and observations about the news.

In a few days, the next article in this series will be available. Between now and then think and evaluate your relationship with an understanding of market-related news and how it affects your trading. Is using the news been to your advantage or vice versa?

Wishing you the best of trading!

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