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.

RELATED TERMS
  1. Informationally Efficient Market

    A theory, which moves beyond the definition of the efficient ...
  2. Gap Risk

    The risk that an investment's price will change from one level ...
  3. Headline Effect

    The effect that negative news in the popular press has on a corporation ...
  4. Announcement Effect

    The impact on markets from the news that a change will occur ...
  5. Press Release

    News that is sent out or released by the company making the news. ...
  6. Investotainment

    Television reporting about the stock market, the economy and ...
Related Articles
  1. Trading

    News Traders

    Market news is the communication of selected information on current events which is presented by print, broadcast, Internet, or word of mouth to a third party or mass audience. Trading the news ...
  2. Trading

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  3. Managing Wealth

    6 Easy Ways To Keep Current

    Here are six ways in which you can keep up with the news while you are on the go.
  4. Markets

    Market News That Seems Promising - But Isn't

    Not all good news is created equal. Find out how some positive stock market news can actually be bad news for investors.
  5. Trading

    Forex: How To Scalp Fundamentally

    Learn why event-driven scalping in the currency market involves balancing fundamentals with technicals.
  6. Trading

    5 Forex Day Trading Mistakes To Avoid

    We will look at five common mistakes that day traders often make in an attempt to ramp up returns.
  7. Markets

    News Corp to Acquire Social Video Ad Company (NWSA)

    As more and more consumers look to online properties as their primary source of news and information, Rupert Murdoch's News Corp (NASDAQ: NWSA) has made a concerted effort to shift resources ...
  8. Trading

    Profit Without Predicting The Market

    Traders who try to predict the future can actually harm their trading options.
  9. Trading

    Finding Short Candidates With Technical Analysis

    Learn how to distinguish tops and bottoms in the equity market when short selling.
  10. Investing

    5 Tricks Companies Use During Earnings Season

    Don't be fooled: Companies use all kinds of tactics to make bad earnings look good. Find out how to see through them.
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 >>
  2. What is "hammering"?

    "Hammering" is a situation where large sale orders are placed against a particular stock because investors believe that the ... Read Answer >>
  3. Who owns Dow Jones & Company?

    Learn how the purchase of Dow Jones & Company by News Corp. included the acquisition of The Wall Street Journal, Barron's ... Read Answer >>
  4. What is the difference between investing and trading?

    Investing and trading are two very different methods of attempting to profit in the financial markets. The goal of investing ... Read Answer >>
  5. Why don't stocks begin trading at the previous day's closing price?

    Most stock exchanges work according to the forces of supply and demand, which determine the prices at which stocks are bought ... Read Answer >>
  6. Why is it important for traders and investors to follow market indicators?

    Learn about market indicators such as the Advance/Decline Index and market breadth. Discover why these indicators are so ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center