How to understand "buy news and sell facts"? How to deal with similar data planes?

The release of the data is negative, but the price does not fall but rises; before the data is released, it starts to go out of expectations, and when the data is released in line with expectations, the market starts to fluctuate in the opposite direction. How do you view this situation? What is the best way to handle it?
View all 25 answers
old building

In fact, this question is about how to deal with fundamental news. I personally think that we should try our best to avoid fundamental news to make orders, because our news is too late, and the market has already started to move after we know it. Besides, there are several bad points about fundamental news: (1) Fundamental analysis It is impossible to quantify the time interval during which basic data or information has an impact on market prices. (2) There is great ambiguity and unpredictability in fundamental analysis. (3) Not all price fluctuations are caused by fundamental factors.

Sometimes, the price rises steadily due to the continuous positive influence of fundamental factors, but when the price reaches a certain price, the closing operation of the long orders entered in the early stage is enough to cause a short-term sharp correction in the market price trend. At this time, although the overall upward pattern of the market remains intact, if some investors enter the market to do long near the peak before the price has a sharp correction, then in the margin market where investors do not have enough capital reserves, it is very likely that there will be a liquidation. Phenomenon. History has proved that liquidation is extremely painful.

1K Upvotes
2 Comments
Add
Original
See more answers
a love letter to the air

There is a word called price in!

Whether it is the stock market or the foreign exchange market, when the price is at a high or low level, funds need to change hands to obtain chips from the low position or throw away chips from the high position. The news is the catalyst to stimulate the change of hands, so we often say a sentence: If it is good, take the money and run quickly; if the low position is bad, take the money and rush in.

Everything that is good is bad, and everything that is bad is good.

If the market is very hot, when the good news has reached your ears, it proves that the news has spread far, and the price has already been pushed up by people who heard the news earlier than you, and you have heard the good news. At that time, I felt that rushing in would make a profit, which happened to be convenient for those who raised the stock price in the early stage to ship.

The longer an important data/event is expected by the market in advance, the more likely it is to buy news and sell facts. On the contrary, it is the kind of sudden good/bad data or events, and the market will act according to the quality of the data before the market has time to react.

As for the best way to deal with it, it is actually better to wait and see. If you have to find a way to deal with it, then just place a two-way order. Because any market behavior of buying news and selling facts is often accompanied by unilateral market behavior, at least in most cases. You don't need to consider the direction of the two-way pending order, and the worries of buying news and selling facts are relieved. The only thing you need to consider is whether the market volatility is enough to support two-way pending orders, and whether you will be swept away by stop losses on both sides.

991 Upvotes
16 Comments
Add
Original
思域

buy news? ? I've only heard buy expectations sell facts.

"Buy news, sell facts" is also called "buy expectations, sell facts". It is not difficult to understand literally. The so-called buying news means buying according to news. It is expected that the bullish news will be bought in large quantities in the investment market in advance, and the price will rise accordingly. When the announcement of the news is not as expected or only just meets the expectation, choose to sell and take a profit. If the sale is later, the selling price may not be as good as before. Even better, so everyone scrambled to sell to close their positions, resulting in the fact of selling.
And if the news exceeds expectations and rumors, there will be relatively few investors selling the facts at this time, and at the same time, the price will rise again due to new buyers pushing up the price. This kind of situation will not sell the fact that it will not have a great impact on the market. It will only fall back slightly before the data is released, and then rise again.
Why would investors choose to sell the facts?
The reason is that when people buy, they only rely on rumors. A few minutes before the news is announced or after the news is announced, investors find that the news may not be as good as the rumors, so they choose to sell to make a profit. Selling to make a profit, I am afraid that the sale will be late, which will cause the price to drop rapidly.

The pricing of the financial market is entirely based on the expectations of the participants for the future. This kind of expectation must have a relatively clear path, and various possible probabilities can be calculated, so that there is a basis for pricing. Compared with worrying that the future situation will get worse, the market is more worried about the unknowable future situation. Huge uncertainty cannot form a unified market expectation, and uncertainty brings panic about the future.

When the epidemic broke out, U.S. stocks fell sharply and circuit breakers occurred one after another. The reason for this was market panic. The reason for the panic was that the market could not reach a consensus on future expectations.

As a result, the Federal Reserve introduced many "rescue" policies, which seemed to rise but fell, and many data releases seemed to fall but rose.

887 Upvotes
12 Comments
Add
Original
View all 25 answers

About

0

work

0

subscriber

About Us User AgreementPrivacy PolicyRisk DisclosurePartner Program AgreementCommunity Guidelines Help Center Feedback
App Store Android

Risk Disclosure

Trading in financial instruments involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Any opinions, chats, messages, news, research, analyses, prices, or other information contained on this Website are provided as general market information for educational and entertainment purposes only, and do not constitute investment advice. Opinions, market data, recommendations or any other content is subject to change at any time without notice. Trading.live shall not be liable for any loss or damage which may arise directly or indirectly from use of or reliance on such information.

© 2024 Tradinglive Limited. All Rights Reserved.