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Importance of News in stock trading

Investment News is a front driver of stock market, price movement widely affect by news, good news pull stock price up, bad news push stock price down. In day trading you can make good money playing news. Properly news analysis and quick action are the key factor for successful stock trading or investing.

News and media for me as a different issue, News is a reality, the things all ready happened, there is no guessing. News is very important factor in a stock market, because it's a reality.
You need to learn to analyze news to know which news going to give which kind of affect on companies earning result. If news indicates better prospect for company advancement stock price jump up and if news indicates bad longer term impact, stock price goes down. Without gassing you can play for stock trading so day trader love the news day trading strategy.

How to find out news is good or bad for particular company?

Some news tells you straight away the impact, some news impact indirectly. Like
  • Company increases its quarterly and annually earning forecast
  • Company comes out with new technology that can able to make wide change
  • New product
  • New services
  • Government positive action
These all news give straight effect on companies earning to related company but it can give adverse effect to competitor. Suppose some company XYZ developed a four time faster computer then today’s available computer and they selling with same or closer price, just image what happen with competitor existing manufacturer, company XYZ capture all computer market, and competitor lose big share in the market.

For day trading like this news who give straight outlook you need to take quick action to make successful trade because everybody going to jump up whoever tacking decision and appropriate action they are the winner or you can attack on competitor in reverse trading position there more chance to become success because everybody looking for particular news company and initially very few people looking competitor.

For stock trading or day trading you can play negative news also, like
  • Company reduce earning guide line
  • Competitor company comes with new and better product
  • Government action that impact negative on earning
  • Legal action
To play you can do short sell or if you option day trader then you can buy put or short call. In news playing strategy first requirement is right analysis of news, reliability of news, quick decision and quick action with these factors you can do successful day trading or stock trading.

If you want to use news day trading strategy for penny stock day trading then you need to first check reliability of news source otherwise there is a chance you stuck by using wrong news. For penny stock company there are no rules from SEC so somebody try to cheat people giving totally wrong news, so for penny stock day trading consider reliability of source.

If you want to use news day trading strategy for ETF day trade, you need to know major component of ETF whose weightage is real high in a particular ETF and follow only that company news for ETF day trading.



Investing Basic

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How to find stock for Day Trading
Day Trading of Stock & ETF Option
Stock Market Instrument
Importance of Media in day trading
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Importance of Stop Loss
Importance of News in stock trading
  



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