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. Baked In The Cake

    Projections, expectations and other news items that are already ...
  2. Material News

    News released by a company that might affect the value of its ...
  3. Informationally Efficient Market

    A theory, which moves beyond the definition of the efficient ...
  4. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  5. Reuters

    A global information provider headquartered in London, England, ...
  6. Gap Risk

    The risk that an investment's price will change from one level ...
Related Articles
  1. Trading

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  2. 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.
  3. Investing

    Can Good News Be A Signal To Sell?

    Sometimes positive announcements can mean bad news for a stock. Find out why.
  4. Trading

    Forex: How To Scalp Fundamentally

    Learn why event-driven scalping in the currency market involves balancing fundamentals with technicals.
  5. 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.
  6. Trading

    How To Trade Forex On News Releases

    When economic data comes out, it can have a marked impact on the currency market. Find out how to profit.
  7. Trading

    Profit Without Predicting The Market

    Traders who try to predict the future can actually harm their trading options.
  8. Investing

    Finding Short Candidates With Technical Analysis

    Learn how to distinguish tops and bottoms in the equity market when short selling.
  9. 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.
  10. Investing

    Best 3 Websites To Find Crude Oil Breaking News

    Discover the best websites to visit if you want accurate, current pricing and news on West Texas Intermediate and North Sea Brent crude oil futures.
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 trends and data influence after-hours traders the most?

    Learn about the specific information that after-hours traders review to influence their trading. Read Answer >>
  3. What is "hammering"?

    "Hammering" is a situation where large sale orders are placed against a particular stock because investors believe that the ... Read Answer >>
  4. What is the best time of the day to trade?

    Unlike traditional investing, trading, or day trading, has a very short-term focus. Analysis may be broken down to days, ... Read Answer >>
  5. Why would my stock's value decline despite good news being released?

    More often than not, when a firm releases an earnings report the market will react to this news by adjusting the firm's stock ... Read Answer >>
  6. 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 >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center