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Trading the news


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#1 Kloto

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Posted 11 September 2010 - 10:34 AM

Hello guys, Could anyone recommend any good book to read about news trading? I'm pretty sure there should be some literature, but I can't find anything yet. Thanks in advance! Regards, Kloto

Edited by Kloto, 11 September 2010 - 10:34 AM.


#2 diogenes227

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Posted 11 September 2010 - 10:57 AM

Hello guys,

Could anyone recommend any good book to read about news trading? I'm pretty sure there should be some literature, but I can't find anything yet.
Thanks in advance!

Regards,
Kloto

Don't trade the news unless there is blood in the streets.

BUY WHEN THERE IS BLOOD IN THE STREETS
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx.

I spent half my money on gambling, alcohol and wild women. The other half I wasted, W.C. Fields.

#3 Kloto

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Posted 11 September 2010 - 01:46 PM

Don't trade the news unless there is blood in the streets.


From this article: " if everyone agrees with your investment decision, then it's probably not a good one. " :D :D :D

Thanks for reply. How about books nevertheless?

Edited by Kloto, 11 September 2010 - 01:46 PM.


#4 diogenes227

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Posted 13 September 2010 - 04:05 PM

Don't trade the news unless there is blood in the streets.


From this article: " if everyone agrees with your investment decision, then it's probably not a good one. " :D :D :D

Thanks for reply. How about books nevertheless?

Don't know any books. Sorry.

Why would you ever even want to try to trade the news?

And are you actually in Saint-Petersburg?
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx.

I spent half my money on gambling, alcohol and wild women. The other half I wasted, W.C. Fields.

#5 Kloto

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Posted 13 September 2010 - 05:24 PM

Don't know any books. Sorry.

Why would you ever even want to try to trade the news?

And are you actually in Saint-Petersburg?


Yes, I am. Because I tested it, and it seems to possibly work. However, I don't have enough data unfortunately.

#6 diogenes227

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Posted 14 September 2010 - 10:44 AM

Don't know any books. Sorry.

Why would you ever even want to try to trade the news?

And are you actually in Saint-Petersburg?


Yes, I am. Because I tested it, and it seems to possibly work. However, I don't have enough data unfortunately.

Interesting. Maybe I should ask what you mean by news -- earnings reports, company developments, or 9/11? Can you share some of how you test and how that leads to the results you have? Maybe you should write the book?

I remember dimly there once was a mutual fund that bought for the long term on earnings surprises. The fund would buy any company's earning surprise to the upside on the day of the surprise and hold that company's stock on there was a surprise earnings disappointment and sell it on that day. A lot of the time the fund was buying gaps up and selling gaps down but it was all right with that. I guess that's trading the news.

I wonder if that fund is still around. :D
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx.

I spent half my money on gambling, alcohol and wild women. The other half I wasted, W.C. Fields.

#7 Kloto

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Posted 14 September 2010 - 04:37 PM

I mean trading indicators rather than news. You know the stuff which comes out almost daily - like jobless claims, industrial production, etc. Usually public reacts to them, many times the reaction is not a big one, however when it is you can make a nice profit. Apart from that, you can seriously tighten your stops: if the reaction begins, it begins immediately, so in case you are in minus when you entered - most likely the reaction is not as you thought. Unfortunately, I only can do testing a month back :D , as I do not have more data.I tightened all the requirements for testing, accounting for a "reaction" only when it was clear and immediate with almost no move opposite. It looks pretty good in testing, of course even if everything works out the same way in practice - this is anyway a slow, slow growing of your funds, however it is still growing. Unfortunately, yesterday and today I tried to apply that on practice, but failed when I would succeed theoretically. But I try to make a lesson out of it, to make notes, what was incorrect that I did, and how I should probably behave next time.

#8 diogenes227

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Posted 17 September 2010 - 01:00 AM

I mean trading indicators rather than news. You know the stuff which comes out almost daily - like jobless claims, industrial production, etc. Usually public reacts to them, many times the reaction is not a big one, however when it is you can make a nice profit. Apart from that, you can seriously tighten your stops: if the reaction begins, it begins immediately, so in case you are in minus when you entered - most likely the reaction is not as you thought. Unfortunately, I only can do testing a month back :D , as I do not have more data.I tightened all the requirements for testing, accounting for a "reaction" only when it was clear and immediate with almost no move opposite. It looks pretty good in testing, of course even if everything works out the same way in practice - this is anyway a slow, slow growing of your funds, however it is still growing. Unfortunately, yesterday and today I tried to apply that on practice, but failed when I would succeed theoretically. But I try to make a lesson out of it, to make notes, what was incorrect that I did, and how I should probably behave next time.

News, even when you know its coming, is random because it's the market reaction that matters. Sure there are times you might want to consider news as an influence, before the employment numbers or the Fed announcements or oil inventories for instance but all that can be paralyzing. I'm not sure this can ever be quantified comprehensively, and if it can't, forget about it.

Linda Raschke, who is a great trader (look her up on the web or in the "New Market Wizards" book) once was asked what she did about news. She said she doesn't pay any attention to it. " I find the less I know," she said, "the better trader I am."

It should be noted, however, she is a blonde. :D
"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx.

I spent half my money on gambling, alcohol and wild women. The other half I wasted, W.C. Fields.

#9 Kloto

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Posted 17 September 2010 - 03:32 AM

Actually it doesn't worry me if the reaction is as it should be or opposite - I just don't have a second to check the actual data when public starts to react. However, I found out that it is very difficult to catch the right moment to enter that new reaction and exit. When in back-testing everything was ok, in practice I didn;t manage to catch even one reaction out of four.

#10 Kloto

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Posted 02 October 2010 - 02:21 PM

This problem can be fixed technically - I mean to enter in at appropriate time - the problem with exit remains open. How to understand when to exit. I do believe still this strategy has much power, inspite of all Linda Raschkes:)).

Edited by Kloto, 02 October 2010 - 02:22 PM.