Originally Posted by IchibomB
Master the Markets
Taking a Professional Approach to Trading & Investing by
Using Volume Spread Analysis
Loved this quote in regards to "news" .....
Mr Greenspan, the chairman of the Federal Reserve appears on the television and makes what appears to be
a bearish statement – the market falls alarmingly in response to this news.
Newscasters appear grimaced on television, reporting why the market has fallen today: “The market has
fallen dramatically today, on negative statements made by the chairman of the Federal Reserve”. To add to
the impact and drama of the announcement, any other negative information is collected to support the story.
Now why is this news release leading you astray and harming your trading? Because this is how the news
should have been reported:
“The market has fallen alarmingly today. Bearish statements made by Mr Greenspan, the chairman of the
Federal Reserve, caused the professionals to mark the market down, in a manoeuvre to discount the
negative news. This had an effect on weak holders and uninformed traders, causing them to panic sell their
holdings to professional traders, who have been waiting for this opportunity to buy at lower prices.
Professional traders were aware of the forthcoming press release well in advance of the announcement,
and were ready to absorb a huge amount of stock. They stand to profit handsomely in the days ahead, as a
result of this successful and expertly timed operation”.
Listen to the news by all means, but always ask yourself, "Have professional traders used this news to
mark the market either up or down, as a moneymaking manoeuvre?"