Should the trading be done on news based or analysis based?

Question

Clifton · Accepted Answer

The biggest disadvantages of news based stock trading is News.Mostly we have seen traders trading on Results.We call it Results based trading. We have seen many a times instead of good results the stock prices declines.We don’t know what happens inside and how the stock prices gets manipulated on the day of results.The group of investor’s who invests or trade with around 1–2 lakhs and makes around 5–10% and they feel that they have achieved something. These group of people are called Retail investor's.Insider Information and Insider news is the biggest disadvantage:Lets say ABC company is going to announce their Financial Results tomorrow. The results are pretty good. Do you think such things will be kept as secret. At least top officials will be knowing it. They leak the results as they itself are not allowed to trade and they receive huge commission against the information.Now on the Result day the group of people who already knows the result will start investing lakhs and crore of money in ABC stock and it will lead to huge liquidity and stock will go up. Retail investors thinks that there is results and the stock is going up and the retail investors will jump into them with all the money assuming that results will take the stock up.By the time result comes out. These group of people will now off load the stocks they have purchased in early hours again leading to huge sell off and panic situation.Now Retail investor’s gets stuck buying at higher prices, Either they loose money or they keep on holding. By the time these kind of group would have made around crores of rupees which a retail investor can’t make in a life time or even ABC company will take years to make it.They only follow one rule ’’BOOK PROFIT’’ and they don’t care whether prices goes up or down. They have made their fortune.This is the biggest disadvantage of New based trading!

Frederick · Answer

In 2026, the most effective trading strategies combine both news and technical analysis. While news acts as the "engine" that drives market volatility, technical analysis provides the "map" for timing entries and exits. 1. News-Based Trading (The "Why")News trading focuses on catalysts that cause rapid price swings. It is ideal for capturing quick gains but carries high risk due to extreme volatility. Key Triggers: Earnings reports, central bank decisions (like RBI or Fed meetings), inflation data (CPI), and geopolitical events.2026 Landscape: Institutional AI and high-frequency algorithms now process news in milliseconds. For retail traders, the "first impulse" is often too fast to catch safely. Success now lies in trading the secondary waves or "fading the news" (trading the reversal once initial excitement peaks).Risk: Spreads often widen significantly 3–10 seconds before a major release, and "slippage" (getting a worse price than intended) is common. 2. Analysis-Based Trading (The "When")Technical analysis relies on historical price patterns, volume, and indicators to forecast future trends. Core Tools: Moving Averages (EMA), RSI for momentum, and support/resistance levels (like Nifty's 200-DMA).Benefit: It provides a structured, emotionless set of rules, helping you stay disciplined during market swings.Limitation: It can be reactive rather than predictive, often identifying a trend only after a significant move has already occurred. 3. The Recommended Hybrid StrategyFor 2026, professional traders use a Top-Down Hybrid Approach:Fundamental/News Filter: Identify a "Strong" or "Weak" stock based on recent earnings or news sentiment.Technical Trigger: Use chart patterns (like a "Block Break" or "RSI oversold") to find the exact entry point.Risk Management: Set stop-losses based on technical levels but adjust your position size according to the expected "News Volatility".   Trading Style                            Best Use Case                                                  Main RiskNews-BasedScalping intraday volatility; event-driven trades.Slippage & fakeouts.Analysis-BasedTrend following; identifying long-term support.Lagging indicators.HybridHigh-probability setups with clear logic.Complexity; requires multi-tasking.

Should the trading be done on news based or analysis based?

2 Answers

2 Answers

Should the trading be done on news based or analysis based?

2 Answers

2 Answers

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