Day Trading Techniques – News playing

The basic strategy of news playing is to buy a stock which has just announced good news, or short sell on bad news. Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits (or losses). Determining whether news is “good” or “bad” must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. This is because rumors or estimates of the event (like those issued by market and industry analysts) will already have been circulated before the official release, causing prices to move in ancitipation. The price movement caused by the official news will therefore be determined by how good the news is relative to the market’s expectations, not how good it is in absolute terms.

Check out now the next Day Trading Technique – Price action