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 is a technique to trade equities, currencies and other financial instruments on the financial markets. Therefore trading news releases provide a significant tool for news traders. Economic news reports often spur strong short-term moves in the markets, which may create trading opportunities for traders. A news trader is looking for announcements about corporate profits, a change in management, rumors of a merger, which are all events that can cause a company's share price to move wildly up or down. Interest rates, unemployment and export rates, or the central bank's policy shifts, can cause a major change of an exchange rate.
Etiquette of news reporting
News organizations are often expected to aim for objectivity; reporters claim to try to cover all sides of an issue without bias, as compared to commentators or analysts, who provide opinion or personal point-of-view.
Newsworthiness is defined as a subject having sufficient relevance to the public or a special audience to warrant press attention or coverage.
In some countries and at some points in history, what news media and the public have considered "newsworthy" has met different definitions, such as the notion of news values.
With the advent of the Digital Age everything we thought we once knew about journalism needs to be rethought. Today the work of journalism can be done from anywhere. It requires no more than a reporter and a laptop.
There are many considerations when market news is involved:
- The reader and writer interpretation,
- The distinction and reliability of tweet, blog post, newspaper story, magazine article, and book.
- Professional or amateur input to market news items and a variety of “pro-am” relationships which have emerged.
- The boundaries delineating for-profit, public, and non-profit media have become misconstrued at times, and the cooperation across these models of financing has developed badly.
- Within commercial news organizations, the line between the news room and the business office is questionable,
- The line between old media and new media has blurred, practically beyond recognition.
These alterations inevitably have fundamental ramifications for the contemporary ecology of news. The boundaries of journalism, which just a few years ago seemed relatively clear, and permanent, have become less distinct, while potentially the foundation of progress even as it is the source of risk, has given rise to a new set of journalistic principles and practices to survive the never-ending change encountered with modern technology!
It is indeed complex, but it seems to be the future.
News trading methodology
Trading decisions based on news developments are nothing new. Whether the market-moving news arrives by boat, carrier pigeon or Blackberry, traders have always been eager to be the first to exploit and act on information that may impact a given market.
Yet now news is only new for a fraction of a second. Algorithms and rules-based engines filter text as it appears online, identify its underlying meaning, assess its importance and then - when warranted - execute trades based on it. All this occurs in a matter of milliseconds - ideally, a thousandth or two of a second before competing traders' algorithms do so.
At the same time, the definition of market news as it applies to trading markets is changing as well. In the age of Facebook, Twitter and social networks, we are seeing many new and different kinds of data sources that can be analyzed and mined for tradable insights, which in turn can be turned into machine-readable text or numbers and assessed for value by trading algorithms.
From the development of news to market news, we have the emergence of the “news trader.”
A news trader is a trader or investor who makes trading or investing decisions based on market news announcements. Economic reports and other news can have a short-lived effect 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.
News traders rely on short-term reactions to market 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 market 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 a news trader must be one of the first to receive breaking market news.
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