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Trading the news
Trading the news is a technique to trade any financial instruments, profiting on price fluctuation, that follows a sensitive news release.Any news release which can have an impact on the profitability of the companies, stirs a strong short term moves in prices. This creates an opportunity to trade those related financial instruments. Announcements of corporate profits, a change in management, rumors of a merger, acquisitions, new product release, new of labour problems, change in interest rates, export rates, or change in bank policies, news of calamities, terrorism or war, political and communal disturbances, etc; all can make the prices move impulsively. The traders continuously and cautiously watch for such news, make an analysis of their influence on company profitability and thus on stock prices. Based on their assumption they take trade positions. Recently with the easy availability of information, trading on news is becoming more popular. Technical analysts always will say that, all news is reflected on the stock charts.
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