Learn To Shield Trades From Uncertain News

2020-02-10 | Simpler Trading Team

Good news is almost always buffered by uncertain news in today’s fast-moving cycle of information.

It’s enough to test the mental mettle of any trader on a daily basis.

Markets dusted off heightened coronavirus fears and the president’s announcement of a multi-trillion dollar budget. In the same breath of the news cycle, oil lagged and gold held steady as TSLA kept the bears at bay once again with an uptick in price.

“Those headlines really remind me of how much I love to ignore the news 100% and focus on the patterns and setups,” said Henry Gambell, Senior Managing Director of Options Trading. 

All the news, good or bad, can generate excitement and anxiety among traders.

“So many traders throw themselves at the market and hope it will work out,” Henry said. “You have to get your emotion out of the way.”

Events during the past few weeks have made it difficult to avoid the news.

“The market will trade on hype and news and FOMO (Fear Of Missing Out) that you can’t anticipate,” said Bruce Marshall, Director of options and Income Trading.

“When the dust settles, it really doesn’t matter,” Bruce said. “We trade what we get every day.”

Sometimes the news may not be all hype. Revelations about the coronavirus could reveal long-term issues that could affect big companies with operations in China.

“We’re going to see some impact on some of these mult-national companies,” Bruce said. “Nobody knows how bad it’s going to get.”

Bruce will be watching for a buying opportunity depending on what plays out in the market due to the coronavirus effect.

We Saw: The markets maintaining an overall upward tick — 

  • President Trump’s annual budget and debt reduction plan
  • Tesla stock showing Teflon-esque resilience
  • Twitter stumbles even after $1 billion quarter reported last week

We’re Watching: markets that seem to dismiss negative news — 

  • John Carter left on a plane with an SPX bearish butterfly in play
  • “Bottle some euphoria” if you can -- Henry Gambell, liking market uptick 
  • Sam Shames eyeing upward moves -- “do what is best for your account”

Learn more about navigating news and the markets — check out the Simpler Trading community HERE.