Squawks, Rumours and Remaining Focussed

[TheNegotiator 13]

Yesterday was a classic of squawks trying to relay news to justify moves. Rumours were that China GDP was going to come in higher than the expected 8.4% at 9.0%. Obviously that was why stock indices were rising! Well maybe a little, maybe not at all. Who really knows. There was another rumour that it'd come out worse. Go figure.

 

http://www.zerohedge.com/news/china-gdp-misses-expectations-mile-rises-only-81

 

I know that for me, I had already taken account of the market technically and felt a rise was possible. Perhaps not to the extent we saw, but nonetheless. After a big drop on Tuesday, the price was clearly right and when you have quick unsustained moves, strong reversals are always a possibilty.

 

My point is you have to take into account what is going on in the outside world, but not allow it to sway you too much from what is happening on your screen. Sure, yesterday we moved 'with' the rumour, but this isn't always the way. For today, I'm not going to be biased into selling either because it actually came in well below expectations and even further below the rumour. What the market tells me about its intentions will hold the most significant weight in my trading decisions.

 

Squawks can be invaluable to relying critical information in a timely manner, but they can also muddy the water and distract your attention just that little bit too much from the market action if you're not careful.

[TheNegotiator 13]

Interestingly, this is what the definition of "squawk" is on dictionary.com:-

 

squawk

 

I particularly like #2!

[Obsidian 10]

it is important to follow the news when there is an unexpected, high volatility but we also have to be isolated from extra distraction...

[mohsinqureshii 10]

Interestingly, this is what the definition of "squawk" is on dictionary.com:-

 

squawk

 

I particularly like #2!

 

Well i am also personaly like # 2..

And i am also agree with obsidian

[jazz 10]

Hi TheNegotiator,

 

I understand how you feel. Because of the rumor, I didn't want to take short trades even though my charts set up for a short term pull back. I want to be aware of current events, news, etc., but sometimes those can be hindrance.

 

Cheer,

 

Jazz

[Obsidian 10]

As they say "The news doesn't make the market, rather the market makes the news".

imo when we hear-read something new, it is better to see how market is reacting first.