Inside Trade | Trading News

“I couldn't wait for success, so I went on without it.” -Jonathan Winters




An unmistakably  dangerous way to trade for the unseasoned ones. Most traders stay away from this kind of trading method because of its unpredictable nature but it should be taken into consideration that it could co-relate with its technical counterpart. According to Fundamental analysis, news moves the market. A positive news brings the quotations' increase and a negative decreases it. There are two type of news, the “expected” and the “unexpected”.


The expected news, through the investors' reaction, theoretically dictates how the market should behave while the unexpected news takes away the rein from the investors hand by taking them off-guarded thus directly affecting the market. 


In order for a trader to take an  additional step towards success, he/she must be able to; know when the “Expected news” would be released; understand its marketing function and use it his/her advantage; and know how the technical and news analysis could work together.  


“Buy the rumor – sell the fact” is a famous quotation for news traders that explains how the market behaves. The market grows while the official announcement of the news has not been released yet and suddenly falls when it does. One of the key to succeed in this kind of method is to get the news ahead. Nowadays there are brokers that provides news before its official release.

 But  be wary, traps maybe laid down by big players, an obvious news may suddenly turn into a battle of wits. There are certain historical figures that had prominently gained fame by using this kind of trading. A supposedly plain news, turned upside down,  and used in a creative way to manipulate the market to their advantage.

One of which is Nathan Rothschild. With the help of his organized messengers, received the news about the Napoleon's defeat at Waterloo before hand and used it to a great advantage. After learning of the defeat, he went straight to the London Stock Exchange and sold his securities. Due to his actions, a rumor had spread like a wildfire about the failure of the Englishmen that later on caused a panic at the exchange. Soon after, the rate of securities had tremendously fallen and Rothschild bought it again to gain a humongous capital.