| Part 1 - What has market moving potential? | | | | sales, Inflation (consumer price or producer price), |
| Have you ever been in a long position that | | | | Unemployment (Non-Farm Payrolls), Industrial |
| completely reversed after an earnings release? Or | | | | production, Business sentiment surveys, Consumer |
| perhaps your trade's bottom fell out after the FOMC | | | | confidence surveys, Trade balance, manufacturing |
| Policy Statement? Or maybe you have seen your | | | | sector surveys. These releases almost always have |
| profits evaporate away after a scheduled economic | | | | some immediate impact on a certain sectors, as they |
| data release? Finally, you anticipated a big move after | | | | are known as the "market movers". |
| a news release only to have the underlying stock | | | | In addition, you will find that analysts will release |
| make an initial surge and then fall back to the original | | | | reports on a daily basis. The two that have the |
| levels or worse. Whether you are a short or long | | | | biggest impact are Upgrade/Downgrades and Target |
| term investor, learning how market news will affect | | | | Raised/Cut. This is not the place to discuss the true |
| your open positions is a skill all traders should acquire. | | | | intent of many of the upgrades/downgrades. It is |
| Entering or exiting a position or perhaps adjusting a | | | | just important to be aware that on any given day |
| stop based on news analysis is essential to | | | | news may be released that can affect your trade. |
| maximizing your profits. | | | | Finally, you have a company's earnings report. These |
| It is not only is important to have a system in place | | | | reports are often loaded with a ton of data to be |
| to analyze the possible future performance of a | | | | digested by traders. Did they meet their |
| stock. However, one should also pay close attention | | | | expectations? Did they earn enough money for the |
| to economic calendars, earnings calendars, etc. Any | | | | quarter? Have they raised or lowered their guidance |
| experienced trader will tell you that NEWS CHANGES | | | | for the remainder of the year. Were there any |
| EVERYTHING! News overrides even the best | | | | unknown charges that will affect future cashflow? |
| technicals. News will cripple the best trade plans if | | | | For drug/biotech companies, you need to be aware |
| ignored. News trading involves the analysis of simple | | | | the results of their experiments. Will the drug move |
| major economic indicators and timing positions or | | | | on to the next stage or is it being cut. |
| adjusting stops upon their release in the market. | | | | So now that you have a foundation of what news |
| In addition, it is also important to pay attention to | | | | to look for - trust me there are a lot more sector |
| the market sentiment leading up to the unveiling of | | | | specific news releases that can affect your trade - |
| the release/report. Analysts often provide | | | | let's take a brief moment to talk about where to find |
| "forecasted" figures and the previous released | | | | this information. Here is a list of my favorite new |
| figures. Often times, it is not the actual release of | | | | sources: |
| the report that drives the market rather the | | | | |
| speculation of a possible positive or negative effect. | | | | 1. Briefing |
| In most cases, speeches and news articles about a | | | | 2. Trade The News |
| certain release may also drive the market more than | | | | 3. Yahoo Finance |
| the release; from my trading experience, the actual | | | | Now that you know why every trader should know |
| release has moderate impact on a certain stocks, but | | | | what news release are scheduled for release each |
| it is the speculation before the release is what the | | | | week - New Overrides Everything - we can begin to |
| stock market moves the most. We've all heard the | | | | focus on some rules for identifying trade |
| saying, SELL THE NEWS! | | | | opportunities based upon the market's reaction to |
| Since there are numerous indicators released | | | | the news release. Check out Part 2 of our series on |
| everyday, not every release has a major impact. The | | | | How to Trade the News to learn the rules |
| following are the Top 8 market moving economic | | | | professional use as a part of their trade plans. |
| reports: Interest rate decision (speculation), Retail | | | | |