1. Introduction to Stock Trader Types
  2. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  3. Decision-Making Methods: Informed, Uninformed, Intuitive
  4. Informed Traders: Fundamental Traders, Technical Traders
  5. Swing Traders
  6. Buy and Hold Traders
  7. Value Traders
  8. Trend Traders
  9. KISS Traders
  10. Momentum Traders
  11. Range-bound Traders - Break-out Traders - Channel Traders
  12. Options Traders
  13. Options Seller Traders
  14. Day Traders
  15. Pattern Day Traders
  16. Intra-Day Traders
  17. Intra-Day Scalp Traders
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

While most traders rely on technical and fundamental analysis for their decision-making, there are also those who make investment decisions based on market news. Market news is the communication of selected information on current financial events. By trading the news, traders follow economic news reports as an indicator of short-term market movements. These movements create trading opportunities. A news trader tends to look for large-scale announcements—things like corporate profits, a change in management, rumors of a merger or acquisition, or a scandal. All of these may prompt fluctuations in share price, some of which may be sizable and dramatic. Broader news items like interest rate changes, unemployment and export rates, and changes in regulation can also cause trade-worthy events.

News traders may follow the news first and foremost, but they also usually have a sense of what is going on in the companies that they are betting on. They also have to remember to interpret the news that they receive carefully. It’s important for them to consider the distinction and reliability of some news sources (for instance, of tweets or blog posts as opposed to newspaper stories), the authority and expertise of the news presenter, and the other interests that may be at stake. For example, it can be difficult to delineate between for-profit, public, and non-profit media.

As the news and media have shifted, so too has the way in which traders respond. News is available at a rapid pace which far outstrips the stream of news just decades ago, and traders making decisions based on the news therefore have to react much more quickly.

News trading methodology

Traders have been making trades based on the news for as long as markets have been in existence. What has changed in that time is the “newness” of news. Today, news is disseminated worldwide in a fraction of a second, meaning that traders have a much narrower window of opportunity to capitalize on their unique knowledge. For that reason, algorithms and rules-based engines are common, helping traders to filter news stories and process information as quickly as possible. In the world of news trading, a few milliseconds may be the difference between a profit and a loss.

News traders tend to rely on short-term reactions to the news, which prompt shifts in the markets. They may look to historical data to predict future market news’ impact on stock prices. Then, when a news story hits, they have to react instinctively. Of course, there is a high degree of risk associated with this type of trading, but more experienced news traders who focus on specialized areas of interest can be quite successful. (For more, read How to Trade the News)


Noise Traders
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