Do you listen to online financial networks while trading? You don’t have to

My trading room has an open mic policy that allows trading room participants to interact with me during a cash trading session. It is unusual to talk to a member of the room and hear the financial network rattling in the background. I believe that trading while listening to financial news can be very detrimental to your trading success. These networks typically prepare people to assess current market conditions and forecast various aspects of trade and investment.

But there is a definite problem with getting trade information online. They all have an agenda that you may or may not complement your trade. In addition to the fact that the agenda is usually based on the political affiliation developed by the network, many of these guys are just thinking about the possible outcomes of daily market activities. What is the benefit?

To become a profitable trader, you need to do your own 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 indicator risks. There is no doubt that a television “talking head” can predict short-term price movements.

Today has been a great example of why your analysis is much more valuable than network trading trust. I often listen to one or more financial networks before trading because I am interested in stock issues that affect the NASDAQ. Among the participants in the discussion this morning was a general consensus that NQ is going to reach a new high with the morning session.

Guess what? The morning NQ stock was a downside, not a plus. The market made no attempt to rally, but remained in a humiliating channel of continuation and spent much of its time experiencing new lows. So much for television forecasting. Usually just general speculation often coincides with stock issues in the speaker portfolio. Worse, there’s a good chance it could be just speculation about that could happen.

Another great example of the misinformation spread by these “talking heads” is the forecasts to the market based on the direction of futures during the night. In my experience, as futures prices fall overnight, this indicates only a small dependence on what traders have scheduled for the cash session for the day. So next year we hear, “the action of futures prices overnight shows that the market will change,” you may generally dismiss this information as nonsense. Overnight traders and cashier traders are two different groups that often have different goals and motivations.

To sum up, I listen to music or just enjoy the silence while trading, and sharing “expert” advice can cause you (or me) to focus. The day when you have a bias of dubious difference is a recipe for a trade disaster. Do yourself a favor and abandon the “experts” and make your own trading decisions based on what you see on the chart.

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