How to read news for your day trading

This is may be the most important lesson for all day traders and small investors.

You have to know several things:

1. You are in disadvantage side comparing to professional traders, fund managers, because they are using more powerful trading terminal than you. You are using Bloomberg, Reuters, Thomson. You can not beat them. But you can follow them using best online trading tool specially made for individual investors. How?

2. Read the news shown on the headlines and specific sections. Pay special attention to some keywords like Goldman Sachs, Bernanke, Central Banks, Intervention, Historical movements, etc. Those keywords density in the newspapers and articles will indeed reflect the mood of the market. For example, recently we have seen so many “disaster”, “panic” “tumbling” ” historical volatility” “woes” in all major sources, this is just another reflection of the crazy market. Then what you should do, if you are day trader! Now, here is what I will suggest.

3. Determine the market focus for a particular trading day after having read the major news. For example, you probably noticed that the last few days, central bank intervention from Australia and Japan appeared in the headlines, then you should start to figure how these important word will affect the market. Check the most relevant market and most immediate market available!!! Australia and Japan belongs to Asian markets, then you should focus first how asian stock markets perform.

Well, here is the answer from Japan, Hong Kong of the last two days! What happened! Risk appetizer come back! Just teh perfect timing for a strong rebound of non-dollar tumbling.

4. Now you may put some median bet on risk linking asset, like financial stocks, high yield currency pair.

I bought australlian dollar, and usdjpy and audjpy and I made 10% for my account This is enough, isn’t it?

Good luck!

Filed under: Trading lessons | Tagged: broker, central bank intervention, day trading, financial news, financial stocks, forex, Hang Sang Stock Index, high yield currency pair, stock