Jump to content



Photo

Just a Question Tonight


  • Please log in to reply
14 replies to this topic

#1 Frac_Man

Frac_Man

    Hank Wernicki M.A.

  • Traders-Talk User
  • 1,458 posts

Posted 30 January 2007 - 10:59 PM

If we rely so much on our technical analysis, why is there so much talk about news and events ? We know for a fact that there is NO connection between the two. Personally I never read any financial news ..... or reports etc .... Hank

#2 maineman

maineman

    maineman

  • Traders-Talk User
  • 1,987 posts

Posted 30 January 2007 - 11:08 PM

That's a Great Question. For me, I do not watch CNBC (if al they showed were different views of Maria I might...) But seriously, every day I keep in my trading diary how the market REACTED to "news", such as interest rate decisions, unemployment numbers, etc. I could care less (as far as my trading goes) to the actual numbers, but I DO care how the market reacts to these numbers. Second, and for short term traders like myself, the fake/Fed induced short term volatilty that occurs around FED announcements is IMPOSSIBLE to predict or trade, unless you are a gambler or a cowboy, and I am neither. So it sure is helpful for me to know about certain market-related "news" so I can stand aside (as in the case of Fed announcements) or gauge market reaction in the other cases mentioned. mm
He who laughs laughs laughs laughs.

My Blog -Maineman Market Advice

#3 U.F.O.

U.F.O.

    U.F.O.

  • TT Patron+
  • 5,605 posts

Posted 30 January 2007 - 11:09 PM

Whoever said there was "no" connection between the two? IMHO, technical analysis "precedes" the news, there is an indirect correlation. Fundamental analysis is not worthless. News is not worthless. TA sometimes is the laggard in the lineup. Could TA have predicted 9/11? Nada. U.F.O.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

#4 Frac_Man

Frac_Man

    Hank Wernicki M.A.

  • Traders-Talk User
  • 1,458 posts

Posted 30 January 2007 - 11:22 PM

Dick Diamond has been trading for a living since 1968. He does not read the news / reports etc

Maybe there is something to this ?










Whoever said there was "no" connection between the two? IMHO, technical analysis "precedes" the news, there is an indirect correlation. Fundamental analysis is not worthless. News is not worthless. TA sometimes is the laggard in the lineup. Could TA have predicted 9/11? Nada.

U.F.O.



#5 Rogerdodger

Rogerdodger

    Member

  • TT Member*
  • 26,862 posts

Posted 30 January 2007 - 11:24 PM

Good question.
I know some TA "purists" claim to not listen to the news at all.
Others can't live without it.

I think the news can push sentiment to an extreme, creating opportunity.
Is it really news? Often good news is built into price and the "news" is sold.

Sometimes it seems that "old news" is recycled to move a stock up or down.

Likewise have you ever seen "news" turn out to be an unfounded rumor?
Ever notice how that happens during Options Expiration?

Such as the recent rumors of Iran attacking a US ship during the opening hour.
Remember that rumor, Jan 18th?

That moved Gold, Oil, the Dollar and Stocks sharply and briefly triggering a lot of stops.

We try to predict the tide, the news may warn of a coming Tsunami.

Edited by Rogerdodger, 30 January 2007 - 11:26 PM.


#6 selecto

selecto

    Member

  • Traders-Talk User
  • 6,871 posts

Posted 30 January 2007 - 11:29 PM

A technical trader should be able to trade off charts alone - shouldn't even need to know what the name is. My entry and exit decisions are squiggle based, although I do keep "life" running in the background, just to help discern the mojo. :)

Edited by selecto, 30 January 2007 - 11:32 PM.


#7 U.F.O.

U.F.O.

    U.F.O.

  • TT Patron+
  • 5,605 posts

Posted 30 January 2007 - 11:43 PM

Good for Dick Diamond. What's his W/L ratio? If it's 50/50, or less, who cares if he never picks up a newspaper? U.F.O.

Edited by U.F.O., 30 January 2007 - 11:46 PM.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

#8 IndexTrader

IndexTrader

    Member

  • TT Patron+
  • 7,694 posts

Posted 31 January 2007 - 12:17 AM

I'm a news fan. I read the news in the AM before the market to find out what's happening. I follow the news to the best of my ability throughout the day. Maybe you can trade without knowing the news but I think you put yourself at a disadvantage if you do. The news, and how traders are reacting to it, helps to set the tone of the market. It gives meaning to you bars, to the volume, etc. I'm always fascinated when I hear that someone doesn't pay any attention to the news. So now we come along to a big down day, which violates a support area/trendline/moving average. Our technical trader sells. If he had traced the market action to a piece of news, it might be that there was a news related event that happened at the support area was breaking. So now, the question becomes, if the technical trade sold, did he sell on the news? Maybe in his mind he thinks not...but it so happens that his action coincided with all the guys reading the news. After 9/11 there were various announcements throughout the subseqent days regarding unidentified aircraft, anthrax, etc etc. These news annoucements ALWAYS caused an immediate sharp sell-off. If you were only following the chart you might have been focused on the price action, instead of understanding that an opportunity was created. I think all the factors surrounding the market are worth paying attention to. You never know when one of these factors, technical or not, may give you the clue to make a high odds trade. IT

#9 dasein

dasein

    Member

  • Traders-Talk User
  • 7,696 posts

Posted 31 January 2007 - 12:22 AM

You never know when one of these factors, technical or not, may give you the clue to make a high odds trade.


Well said.

thanks, klh
best,
klh

#10 arbman

arbman

    Quant

  • Traders-Talk User
  • 19,504 posts

Posted 31 January 2007 - 12:47 AM

I check these out whenever I have time, it is better to be informed than not informed like IT said, but I do not base my short to intermediate term trading decisions on the fundamentals either...

http://www.newyorkfe...indicators.html
http://www.newyorkfe...indicators.html

The fundamentals are usually the result of the long term monetary policies and the people's activity that these have only value in understanding their long term compounding effect on the liquidity or illiquidity, imho...

- kisa