Why do People Analyse News?

Beginner Questions Candlesticks, Chart Patterns, and Price Action
1

There is a lot of analysis taking place regarding trading and news.
Why do people do this?
Markets move down - its because Ukraine / Kim Kardashian farts.
Markets go up - its the Federal Reserve / it’s a full moon.
Markets go sideways - CNN runs a story about cats.

Nobody seems to look at NFP when looking at the charts 15 years ago. Why?
Nobody seems to read the headline news articles from 7 years ago to determine reasons for the markets movement.
Why do we try to explain the markets moving now using news, when we only look at charts and bars and patterns in the past?

When we do back-testing, do we look at political news, or just bar patterns?
Why don’t we ignore the news now, and just read the bar formations?

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2

If someone showed you an hourly chart, going back 5 years, with no datestamps, could you pinpoint the NFP releases hour bar, or a State of the Union speech?
Or when the Federal Reserve raised or lowered interest rates?

3

News drives price but it often drives it to levels that can be explained with technical analysis. This is much easier to see in retrospect than in live markets.

4

More so it may be good to be aware of these high impact news events to expect volatility wild swings and traders can close out positions on the strength of that

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5

Analysing news is quite a wise decision as economic releases have a pronounced impact on currencies. Market can be extremely volatile when any such news breaks. Whether you want to trade during volatility or avoid it, keeping in touch with the latest news can be quite helpful.

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6

I feel like movements from news releases are more for like 1D/1W trading, if it were longer term like you’re saying like 5 years, then those will be in months, maybe there it follows a more macro trend but ofc no one really trades those extra long timeframes because no one has the time or money to wait for years for trades to materialize. Just my 2 pips.

7

There are basically two types of analyses including technical and fundamental analysis. These two analyses will help you catch the actual market trend based on which a trade is usually opened. As fundamental analysis is time-consuming, some traders always rely on technical analysis.

8

I suppose my point was more about back-testing.
How do you back-test news driven events?
All we have is the technical chart; bars, patterns, volume.

If you could chart fundamental news, could you correlate it to price moves?
I think, from the view of back-testing, news could be a misleading component.
In any event, I don’t think news can be back-tested.

I think retro-fitting moves to news / fundamentals is a hind-sight game.

9

News plays a critical role in deciding the future of the market. So the information in the newspapers may give clues about the future market trends.

10

News plays a vital role to the traders who love to trade when news occurs. It’s generally because traders can quickly earn their profits during news. There are a number of websites that show all pieces of daily news in a row and traders needs to check their impact level on the market.

11

They have bots that read and analyze news as it is released

12

Well, I guess much of it depends on the news you are reading, and from what source.

The fact is by the time a story has hit the mainstream news, the market move is often over.

This is summed up perfectly in the aphorism, "buy the rumour sell the fact’

Or more aptly at the moment, 'buy on the cannons sell on the trumpets’

You have to be digging deep into industry trade journals, and niche news sites in order to get a market edge.

Obviously certain things like the payrolls, we all get at the same time, but are these even news or just economic releases?

I think the best approach to analyse news, is to see how price actually moves in response to it, in this respect news can be a good measure of current sentiment.

And generally In a bull market, the bad news is ignored, but in a bear, even the the best news is.

I generally don’t bother reading much into the news, other than to keep informed of general trends.

But if you are suggesting that large pension funds, portfolio managers etc should somehow just give up on reading the news, or reading central bank policy minutes, and instead just follow 5 min bars on charts, well that would be a funny world indeed.

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13

I have some time, so I’ll reply… Don’t waste your time trading News… By the time you read about it, Smart Money has already moved or it’s already factored into the price of the instrument…

You have to think for yourself, further ahead and assess situations… Perfect Example in the last 21 days…

Build up of Russian troops on the Ukrainian Border, will they invade? Won’t they invade?

No one really knew. What are the ramifications of an invasion, a War? A little bit of research and study of previous conflicts will give you a good indication.

Uncertainty, Volatility for Instruments such as Energies and precious Metals. Especially as Russia is a major supplier to Europe of Nat Gas and Oil.

So as troop movements increased and a conflict was basically inevitable you should have been long and increasing positions on Metals and Energies. My business has been long on these since February 11th.

Now we have record high Oil Prices ($116/Barrel), so which sectors of industry does this have an effect on?

Transport, Shipping, Travel… The opportunity to short these stocks is now present with the higher cost of running these enterprises… Airlines largest input is Jet Fuel, so these operations have no choice but to lift their fares for goods and passengers.

United
United1132×840 56.4 KB

South West
South West1124×862 57.5 KB

fEDEX
fEDEX1131×856 56.7 KB

Same logic can be applied to Storms and Floods… Who loses the most to these natural events?
Insurance Companies…

Just a simple snapshot of what can be achieved using fundamental strategies without waiting for mythical market moving news releases.

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14

If you know the market’s ongoing trend, you can determine the news movement. For so, some sort of fundamental analysis is also needed. Only technical analysis can help you catch the current trend but if you want to forecast the market, then you have to run fundamental analysis.

15

Oil Prices continue to soar… You should be Long on Oil and Short on enterprises that use it…

United 8-3
United 8-31188×910 64.2 KB

SWA 8-3(1)
SWA 8-3(1)1184×924 58.4 KB

Fedex 8-3
Fedex 8-31200×913 62.8 KB

REAL Traders should be profiting from both sides of their strategy…

Which Major Expenses Affect Airline Companies?.

"Some of the worst times for airlines have been when oil prices spiked up. Airline companies can prepare for slowly rising prices by charging more for tickets or by reducing the amount of flights, but sudden moves higher lead many airlines to lose money.

In 2008, oil hit a high of $147 per barrel, a new all-time high. Airlines were unprepared, and many went through serious restructuring to survive. At that time, the NYSE ARCA Airline Index (XAL) had fallen to around 16. By comparison, the index was at 56 in January 2007 when the price of oil was $60 a barrel. The drastic changes underline the inverse relationship between oil prices and the value of airline companies at that time…"

As per usual… Posting Profitable, Proven Strategies is a thread killer in these Forums…

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16

It is still the price moving upwards that indicates a buy.
The news (war / supply glut / opec) is a post-facto rationalisation.
In the absence of news, the chart tells you what to do.

Curious about your “… Posting Profitable, Proven Strategies is a thread killer in these Forums” comment.
I think you’re right about that, but only because people want signals without the work required to generate them. There is another thread that explores that.
I don’t trade stocks, only indices, sectors and FX, so your airline screenshots are interesting. I will review them later.

17

Oil is the new crypto :smiley:

18

We’ve got a lot more ways of receiving news than we had before so can move before we may of heard about it

19

So did we all start shorting OIL back on the 10th March as it came off it’s unprecedented highs or did we just keep walking around in circles scratching our a$$es while bumping into things…

Maybe the intelligent ones started building their positions a week later as OIL began it’s climb back up after it became obvious that OIL supply is going to dwindle over next few months…

Or the really clever ones increased positions after the strangely convenient missile strike on the Saudi’s Aramco Oil storage facility over night.

What’s the bet OIL gaps up on Market open on Monday…

20

Who cares?

It is a fact that news moves the market, that’s all you need to know…

NFP comes out . Market moves
CPI… Interest rate decisions… market moves

Oil crisis… market moves

Etc etc… who cares where it moves? For us traders we just need it to move… but we better stay out at the moment of the news release, coz we want to trade… not gamble … once we see the market is back to technical mode… we’re in again.

I don’t care if market is up or down… I don’t care why it’s up or down… as long as it moves… I’m fine

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