Why ‘Chase’ Trades Along With The News?
In today’s “every minute of the day” media news cycle it’s difficult for traders to digest what is relevant and beneficial to their trading.
And, who hasn’t heard how people blew out their accounts because “they put it all on a newsletter recommendation” or some other “breaking” news advice?
There is a tendency to feel more confident in a trade because it is being recommended by somebody else — somebody with an air of authority.
In reality, it’s just a trade setup like any other. It’s important that a trader not get lured in with a false sense of security that this particular trade is going to work out exactly as planned.
Remember, it’s always just about probabilities and risk control. Don’t get overconfident just because you read about something online or in the “hot tips” newsletter or heard it from the podium pundits on TV. And don’t get all warm and fuzzy over social media news.
That said, traders must realize that they cannot make a living “trading the latest” off any financial news outlet, traditional or otherwise.
By the time something appears in media format, it is far too late to react.
Huge trading firms have already digested the events that create the news. By the time it makes it to the public outlets the huge funds are dumping these positions off to the person who just heard about it through the social media trend.
Traders — beginners and veterans — miss trades all the time.
Yet, one of the biggest weaknesses of most traders is a need to be in every move. If the markets start running away, many traders just can’t help but jump in, fearing that they may be missing something big.
This is a fatal flaw that will ruin any trader who can’t control this habit. If there is anything to hammer into your brain as you dive into the markets, it is this: it is okay to miss moves.
Traders who do this for a living spend their days waiting for specific setups to take shape.
Keep this in mind: professional traders miss moves while amateur traders try to chase every move.
Don’t let news push you into chasing trades.
Boost your trading possibilities by booting the noise of news.