Is it another "good news is bad news" day? | Forex Factory

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Is it another "good news is bad news" day?

  • #1
  • First Post: Nov 7, 2013 11:38pm Nov 7, 2013 11:38pm
I keep reading that good news is bad news and bad news is good news.

Huh?

Today, the US Stock Market fell on good news because the good news means the Fed Tapers.

Tomorrow is NFP. I read if it's good news, the USD weakens and if it's bad news, it strengthens. Why? Because weak jobs numbers means no Taper and strong jobs numbers mean December Taper.

The world has turned upside down.
  • #2
  • Nov 8, 2013 12:46am Nov 8, 2013 12:46am
Fundamental = funny mental
  • #3
  • Nov 8, 2013 1:02am Nov 8, 2013 1:02am
Quoting Baggi
I keep reading that good news is bad news and bad news is good news. Huh? Today, the US Stock Market fell on good news because the good news means the Fed Tapers. Tomorrow is NFP. I read if it's good news, the USD weakens and if it's bad news, it strengthens. Why? Because weak jobs numbers means no Taper and strong jobs numbers mean December Taper. The world has turned upside down.
Markets sabotage tea party
  • #4
  • Nov 8, 2013 1:18am Nov 8, 2013 1:18am
Yep, bad news is good and good news is bad.

Was reading this week the FED might announce a taper along side forward guidance of unemployment below 5.5% before any rate increase. To counter any 'stock market tantrum' over the actual taper, Yep the word tantrum was used.
  • #5
  • Nov 8, 2013 1:26am Nov 8, 2013 1:26am
Quoting Baggi
I keep reading that good news is bad news and bad news is good news. Huh? Today, the US Stock Market fell on good news because the good news means the Fed Tapers. Tomorrow is NFP. I read if it's good news, the USD weakens and if it's bad news, it strengthens. Why? Because weak jobs numbers means no Taper and strong jobs numbers mean December Taper. The world has turned upside down.
The markets are affected most by those with the largest positions and most money (obviously). These groups are not sitting around waiting for news to then act. They try and anticipate the news and position themselves ahead of time. Sometimes they overestimate and sometimes they underestimate things. So when reaction to a news release seems backwards, it's usually a correction for an over-correction.
  • #6
  • Nov 8, 2013 1:44am Nov 8, 2013 1:44am
Quoting Baggi
I keep reading that good news is bad news and bad news is good news. Huh? Today, the US Stock Market fell on good news because the good news means the Fed Tapers. Tomorrow is NFP. I read if it's good news, the USD weakens and if it's bad news, it strengthens. Why? Because weak jobs numbers means no Taper and strong jobs numbers mean December Taper. The world has turned upside down.

I had to learn this the hard way.many years ago i was building my account from a 500 pound start up and had tremendous growth scalping .my account was at 3,600 pounds within a 9 week period.

i decided to trade the news,it was uk interest rate decision.the release was as expected and good for cable.i went long with a very large position in comparison to my account size,i thought this was a dead cert to double the account.wrong ,i wiped the account in 1 hour 45 mins.all my tedious hard work scalping 4 and 5 pips moves destroyed.

yes the news went in my favour.but what i had not taken into account was the real money had been buying cable all week anticipating the same news as me.price plummeted as profits were taken and i was over leveraged unable to hold my position for the rebound,which followed later and the following days to new highs.just as 2=2 has said,the effect can appear bizarre until you get burnt and learne.

although i bust that account ,it was the turning point in my trading and worth the initial pain
  • #7
  • Nov 8, 2013 3:08am Nov 8, 2013 3:08am
Quoting Mingary
Fundamental = funny mental
You got it right!
  • #8
  • Nov 8, 2013 3:57am Nov 8, 2013 3:57am
Quoting Baggi
The world has turned upside down.
That condition of world is logical when major economy-United Banana Republic currency is never Tapered & always Papered
Extreme actions produce extreme dynamics

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  • #9
  • Last Post: Nov 10, 2013 12:23pm Nov 10, 2013 12:23pm
If fundamental traders, who should be long-term in view, trade the news with the short-term mindset of "price SHOULD move this way or that because the economic number is this or that", they'll frequently fall to the wayside.

Whether they admit it or not, they will usually come into trades with the mindset of "I'm right, and the market is wrong".

From my observation, the only fundamental traders who make money are the institutional traders managing "structural" positions with a longer term outlook and deep pockets to withstand short-term setbacks. And even THESE guys don't trade the news as they come; they will make trades based on their own analysis of the economic trends they see (or don't see) in economic indicators themselves, analyzed over time and not dealt on a per-release basis.

Day traders with shorter term outlooks shouldn't be trading the news. They should be trading the REACTIONS to the news.
I'm not trying to convince anyone. I'm not in the "convincing" business.
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