[firewalker]

Originally Posted by Trader333 »

It was highly unlikely to have any impact because the actual result was pretty must as forecast.

Paul

Actually, the fact that the result is as forecast, does not automatically mean the market will not react.

This is an example of April 30, where the FOMC decided to lower intrest rates to 2.00%, exactly as predicted. One could hardly say there was no impact in this case... As always with news, 'good', 'bad' or 'neutral' news, might be fun for analysts, but is mostly irrelevant for traders.



On Friday, the market was attracted to support at 470, almost like a magnet. Therefore, odds were higher that it would continue lower after it broke down 570.

[DbPhoenix]

You're mixing apples and oranges. There have been a number of market-moving factors in the past which prompt not much more than a ho-hum these days: consumer sentiment, the price of oil, home sales, unemployment, etc. What moves markets the most these days is interest rates, but not the raising and lowering per se. Instead it is the outlook for rates and rate changes that causes the moves. Re 4/30, what moved the market was not the rate cut itself, but the concern that it might be the last.

[firewalker]

Originally Posted by DbPhoenix »

You're mixing apples and oranges. There have been a number of market-moving factors in the past which prompt not much more than a ho-hum these days: consumer sentiment, the price of oil, home sales, unemployment, etc. What moves markets the most these days is interest rates, but not the raising and lowering per se. Instead it is the outlook for rates and rate changes that causes the moves. Re 4/30, what moved the market was not the rate cut itself, but the concern that it might be the last.

I realize the example may not have been the best, but the point was to illustrate that numbers that come out "as forecasted" sometimes will, other times won't, have an effect on the market. True, interest rates usually create more effect than any other potentially market moving factor... But like you said yourself, some factors have caused movement in the past, they don't as much nowadays. But they might again create more volatility in the future, or not...

Anyway, point was to show that when a figure (for example quarterly company results) comes out "as forecasted" does not mean that price cannot take a sudden jump lower or higher.

[smwinc]

Originally Posted by DbPhoenix »

You're mixing apples and oranges. There have been a number of market-moving factors in the past which prompt not much more than a ho-hum these days

I tend to agree with DB.

I understand the point your making FireWalker, but I think rather than the generalisation "economic news doesn't matter", should really be changed to less focus on the result of the news, and more focus on what the market is doing into and out of the news.

Especially in the markets you have listed like the DAX, there have been 100's of days where you would be blown out of the water if you were not aware of the news coming out. The vast majority of the time there is always "evidence" in the price action that something is going on, but it is often much harder to notice and have conviction when you don't have any reason for a sudden sharp reversal.

It doesn't mean that you need to even understand what the news implies (this is almost always the case with earnings); rather using it as a potential timing tool and/or period of volatility.

[firewalker]

Originally Posted by smwinc »

I tend to agree with DB.

I understand the point your making FireWalker, but I think rather than the generalisation "economic news doesn't matter", should really be changed to less focus on the result of the news, and more focus on what the market is doing into and out of the news.

Actually, that's the point I'm making. Perhaps I didn't make myself clear. I didn't say the news won't affect the market. Sometimes it will, other times it won't. But it's not the news itself, it's the action of the market that really matters.

Originally Posted by smwinc »

Especially in the markets you have listed like the DAX, there have been 100's of days where you would be blown out of the water if you were not aware of the news coming out. The vast majority of the time there is always "evidence" in the price action that something is going on, but it is often much harder to notice and have conviction when you don't have any reason for a sudden sharp reversal.

Why would you be blown out of the water because of the news? If price moves against you, you have your (be it fixed be it mental) stop, right?

Originally Posted by smwinc »

It doesn't mean that you need to even understand what the news implies (this is almost always the case with earnings); rather using it as a potential timing tool and/or period of volatility.

That's exactly who I use it. I write down the time periods where potentially market moving news is released. If you don't, you might wonder why price is sitting there for one hour (apparently in anticipation of something). But there are many traders who completely shut their eyes to all these things and trade very profitable as well.

[smwinc]

Originally Posted by firewalker »

Actually, that's the point I'm making. Perhaps I didn't make myself clear. I didn't say the news won't affect the market. Sometimes it will, other times it won't. But it's not the news itself, it's the action of the market that really matters.

No problem, I missunderstood.

Originally Posted by firewalker »

Why would you be blown out of the water because of the news? If price moves against you, you have your (be it fixed be it mental) stop, right?

I was referring to if you traded without consideration of when news is coming out.

Try using a Stop in the DAX when FOMC comes out If you use a Stop Market, you will get out at the high/low, and a Stop Limit won't go off - always fun

Originally Posted by firewalker »

That's exactly who I use it. I write down the time periods where potentially market moving news is released. If you don't, you might wonder why price is sitting there for one hour (apparently in anticipation of something). But there are many traders who completely shut their eyes to all these things and trade very profitable as well.

Yes, I agree. That is basically what I do as well. Often news is far too complex for someone like me to work out. I just try and get onboard. I basically shut out everything, and use a squawk Box to alert me for anything unplanned.

I don't doubt that there are people out there who trade without consideration of fundamental events, however to be honest I just haven't met any. I have colleagues who trade 100% systematically, but they have rules in place to pull orders before news items.

I guess the point of my post is there are many new traders out there who love seeing posts that tell them they can trade very simply and make lots of money. Similar to posts which show you can start trading with $100. I just wanted to highlight the difficulties as well.

[firewalker]

Originally Posted by smwinc »

I don't doubt that there are people out there who trade without consideration of fundamental events, however to be honest I just haven't met any.

Wasp is one, for example

[Kiwi]

I don't use fundamentals at all either.

What I do though is avoid entries immediately prior to planned news announcements, not because of any knowledge or assumptions about fundamentals, but simply because it's prudent to manage risk by not entering at times where volatility is likely to be high. I also don't enter on the first bar of the day or during the Aussie lunch hour. Actually I don't trade the futures market after the stock market closes either. I'm pretty sure that wasp doesn't enter around fomc announcement times or when their is a big announcement scheduled for 8:30.

Other than avoiding times with a historical negative effect on expectancy I am more than happy to let price and volume tell me where the market is currently going.