| Build in a trading system based on the news from | | | | recommended to build a trading decision on similar |
| the media sources could be dangerous task. It is | | | | announcements and trying to build a trading system |
| recommended analyzing economical and financial | | | | or strategy on that. |
| events by yourself and not rely on the conclusion of | | | | As a rule, FED announcements and other economic |
| editors who runs after the sensations. It is common | | | | reports are predetermined and majority of investors |
| for novice traders, when it comes to making first | | | | knows what to expect from them far before they |
| steps in stock market analysis, refer to the news. | | | | are released. In addition all these reports and |
| Traders watch CNN, read Barons, browse Yahoo | | | | announcements are focused to reflect the |
| Finance and look through other financial media | | | | longer-term trend of the economy. Whether it is |
| sources by hunting for a professional investments | | | | unemployment report, rate increase, consumer |
| opinion that may help them in their investments. By | | | | sentiment, or anything else it is not something |
| some reason, when traders lose money nobody of | | | | momentum that may change over a few hours. The |
| them blame media for that. | | | | short-term (couple of hours) stock market swings |
| When it comes to the analysis of the financial news | | | | after an economic report release is actions of |
| through the popular media sources, I would | | | | speculators who are trying to make fast backs in |
| recommend be very cautious. You may try to | | | | volatile trading and in no case it reflects the |
| consider following facts: the media states the facts | | | | sentiment of long-term institutional traders who those |
| after it happens and the media is always right. | | | | reports are aimed for. Yet, it became custom for |
| As an example it could be recommended monitoring | | | | media to judge about affect of the financial even on |
| media reaction on the FOMC rate announcements. | | | | the stock market trend as soon as possible (it is their |
| When FED increases rates and market goes up | | | | completion) and base their judgment on the |
| media tells us that DOW, Nasdaq and S&P 500 went | | | | short-term market reaction. |
| up because the investors are encouraged by the rate | | | | It is not about trusting media or not. In the media |
| increase as an indicator of growing economy. When | | | | world completion makes editors to publish news as |
| FED increases rates, however, the stock market | | | | soon as possible, find some sensations and some dirt. |
| declines, the media makes announcement that the | | | | If you are an investor it could be a good idea to |
| same indexes (DOW, Nasdaq and S&P 500) declined | | | | take a look at economic reports by yourself, check |
| because the investors are disappointed by the rate | | | | charts, make your own analysis and only then put |
| increase since it mean possibility of slowdown in | | | | your own money into a work. |
| borrowing and economy growth. It is not | | | | |