News Trader

DEFINITION of 'News Trader'

A trader or investor who makes trading or investing decisions based on news announcements. Economic reports and other news can have a short-lived affect on particular markets. News traders try to profit by predicting how a market will respond to particular news. The old saying "buy the rumor, sell the news" means that rumors have one effect on a particular trading instrument's price movement, and news can have an opposite effect.

BREAKING DOWN 'News Trader'

News traders rely on short-term reactions to news to drive the market in a particular direction. News traders can look at historical data to predict how future news can affect prices. By becoming familiar with certain markets, news traders can make a guess as to whether a stock or other trading instrument will increase or decrease in price following a news report. Often these price moves happen within an extremely short period of time following the news; therefore, news traders must be quick to respond if they hope to capture profits. This also means that news traders must be one of the first to receive breaking news.

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RELATED FAQS
  1. Why do stock prices change following news reports?

    Stock prices move up and down every minute due to fluctuations in supply and demand. If more people want to buy a particular ... Read Answer >>
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    Learn about the specific information that after-hours traders review to influence their trading. Read Answer >>
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