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

<p id="isPasted">The biggest disadvantages of news based stock trading is News.</p><p>Mostly we have seen traders trading on Results.</p><p>We call it Results based trading. We have seen many a times instead of good results the stock prices declines.</p><p>We don’t know what happens inside and how the stock prices gets manipulated on the day of results.</p><p>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.</p><p>Insider Information and Insider news is the biggest disadvantage:</p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p>They only follow one rule ’’BOOK PROFIT’’ and they don’t care whether prices goes up or down. They have made their fortune.</p><p>This is the biggest disadvantage of New based trading!</p>