I have an open microphone policy in my trading room, which allows trading room members to interact with me during the cash trading session. It’s not uncommon to talk to a classmate and listen to a financial network in the background. My belief is that while you are listening to financial news, trading can be very detrimental to your trading success. These networks typically draw individuals to assess current market conditions and make forecasts on various aspects of trade and investment.
But there is a different problem with earning trading information from a network. Everyone has an agenda to complete your trade or not. In addition to being an agenda based on the political affiliation that the network pursues, many of these guys are speculating about the results of day-to-day market activity. What good is that?
To be a profitable trader it is essential to do your chart analysis and start trading based on that analysis. In the short term, only chart analysis is an acceptable trading method along with real-time indicators. There is no doubt that a TV “talking head” can predict a short-term price movement.
Today has been a great example of how your analysis is much more valuable than trusting your online trading brain. I often listen to one or more financial networks before I start trading because I am interested in stock issues that affect the NASDAQ. There was general agreement among the board members this morning that the NQ would hold a new high-level session in the morning session.
Guess what? The morning NQ action had a downside, not up. The market did not make the slightest attempt to collect, but it remained in a detrimental follow-up channel and spent a lot of time testing new bass. With so many TV predictions. It’s just a generic speculation that goes hand in hand with problems in the portfolio shares of speakers. What’s worse, there’s a good chance it could be just speculation about pigs might happened.
Another great example of the misinformation that these “talking heads” are spreading is pre-market projections based on the direction of the future of the night. In my experience, the fact that future prices are falling from one day to the next indicates only a slight correlation with what the traders in the session plan for the day. So next year, when you hear about “the future price action of the night indicates that the market is going to move down” you can generally dismiss information as nonsense. Night traders and cash traders are two distinct groups and often have different goals and motivations.
In short, I listen to music, or I just enjoy the silence while exchanging and exchanging advice from “experts” that can lead you (or me) to a bias. A day with questionable separation bias is a recipe for commercial catastrophe. Do yourself a favor and leave it to the “experts” and make your trading decisions according to what you see unfolding on the chart.