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Article: Professionals Trade People’s Psychology Not the Markets

This is the fourth of a series of four articles titled “Key Concepts to Correct Trading Behavior – A guide to relevant concepts for trading success in a market governed by High Frequency Trading (HFT) and Program Trading”,  focusing on the most important concepts any trader should internalize in order to show a correct trading behavior, in a world where the majority of trading volume is generated by computer programs.

I have written an introduction to the series and the first three parts of it, titled respectively “The Bandwagon Theory” and “The Dangers of Asking “Why?” and  “Facts and “Truth” Do Not Make Money“. This week I present the fourth and last part titled: “Professionals Trade People’s Psychology Not the Markets”. I will keep working on the other sections of the eBook. Notice that I am also working on the most important section that illustrates a practical application of  the Bandwagon Theory, using the daily chart of the EUR/USD forex cross (the section ‘The Psychology of Trading: the Bandwagon Theory illustrated’ will only be included in my free eBook that I will make available on this Blog). This series of articles is introduced here.

Trading-PsychologyIt should never be forgotten that professional traders  trade people not financial instruments. As strange as this sentence may sound, it represents a correct assessment and critical point novices and more experienced traders often fail to comprehend. The outcome is typically confusion as of the why a market often contradicts rationality and all sense of reason. Futures, forex and stocks financial instruments cannot do anything in and of themselves; their prices are determined by the perceptions of people which, in turn, are completely determined by emotions. It is these emotions, primarily greed and fear that often cause a market to extend too far upwards or downwards, well beyond reasonable levels. Financial instruments do not behave according to neat, simple mathematical measurements of value. Rather they oscillate frequently from over depressed states to overextended ones, without rest. This behavior is what creates opportunities in larger, as well as, smaller timeframes. This is what keeps new people coming in, and the old beaten ones leaving the markets.

The professional trader, understanding this behavior, builds his or her skills around knowing when one emotional state is about to give way to another. This is trading success in a nutshell. Success is not knowing what will a futures FX currency contract reaction be to a central bank announcement or trying to guess if and when a company will announce a new product. Trading is all about people and their emotions, that is why chart reading is so important. Fundamental data contained in balance sheets, income statements and other information sources represents elements from a picture of the past, a time to which market players have already emotionally reacted to. On the other hand, price and technical analysis serve as a living map, built trade by trade, of players’ current emotional state. These are important tools for the active short-term and swing trader or those who want to time position trades or even longer-term investments.

However not all Technical Analysis (TA) tools are useful to build a living map of players’ emotions. In the days of Program and Algorithmic Trading (AT) and High Frequency Trading (HFT) the majority of Technical Analysis tools are not adequate. When TA works it provides signals too late with a sensible lag, or it does not provide signals and setups at all. Besides the lag, trade setups indications from TA are more subject to stop-losses, as well. Moreover the majority of TA tools only provide a point in time when it seems reasonable to enter a trade, often not indicating where the stop-loss should be placed and, more importantly, where profits should be taken. Thus the construction of a complete trading plan would require the use of a coordinated set of TA techniques which often provide readings that are in contrast with one another.
The author’s belief that it is very difficult to make money with traditional TA is comforted by the fact that the majority of people (more than 95%) lose money in the markets. If you don’t want to be one of them and to be part of the 5% of consistent traders it is important and necessary to start thinking and doing things differently.

Most new traders are attracted into learning classical technical analysis (TA) but to make it work strong discipline and a rounded psychology are needed. Typically a trader will focus most of his/her time and resources on the trading method while seasoned traders know that TA requires a better grasp on money management and psychology. While psychology is probably the most important aspect of trading success, the trading method is probably the less important, although critical. Time learning a good trading method is well spent, but it is better to spend time on a method that works and helps the trader to build its emotional capital, i.e. allowing managing his/her emotional state with a sound trading psychology, while providing a complete trading plan. A good trading plan is made up of 8 to 10 different elements (depending on whether you trade one or more markets) which classical Technical Analysis (TA) is not able to identify without the need of resolving contrasting readings from different TA tools.

A trading method that helps avoiding this issue is the method of Measured Moves which helps modeling price structure without the need of using TA tools. This method limits the use of TA tools because it is based upon the observation of the effects of modern Program and Algorithmic Trading on price. Computerized programs do not have an emotional component, but repeat the trading rules continuously at every setup and opportunity. When Program Trading is active price dynamics are purely based on cause and effect, because trading rules themselves are based on price levels although, as already noticed, market news and other events can temporary modify price structure on the smaller timeframes.

Trading rules used by Program Trading were born and improved upon from the analysis and observation of price subdued to the actions provoked by human emotions (mainly fear and greed) and having the effect of dynamically altering the balance between demand and offer. Such rules became very efficient with time and, with the continuous rising of technology and computer-based trading in the stocks, forex and derivative markets, as well as, the increased trading volumes, they bring about price behavior that materializes in a truly self-fulfilling prophecy. This is what happens on the markets nowadays and it is somehow similar to what happens when price approaches some important moving average (like the 100-day or the 200-day moving averages), i.e. there is always some sort of reaction. When measured moves are applied backwards to price data going back to the last 100 years (for instance using Dow Jones end of day data) it is disconcerting to see how well the related trade setups work, offering valid entry and price target areas. This is a very significant fact because it shows that the logic of computerized programs, which was initially derived from the study of the psychological response to price dynamics of average traders’ groups, evolved in a direction that correctly manages money, risks and profits while taking the important psychological aspects into account. Moreover the application to market price of the method of Measured Moves (largely employed by Program Trading) shows that the basic rules implemented by computer algorithms nowadays worked before computer technology was even invented.

In conclusion, not only Professionals trade people’s psychology but nowadays also Program Trading does that. Program Trading and Algorithmic Trading (AT) along with High Frequency Trading (HFT), are conquering more and more volume on the stocks and futures markets. A recent research shows that more than 30% of the UK stocks market volume is traded by HFT; same figures reach more than 70% in the US markets.

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Articolo: Fatti e “Verita'” Non Fanno Guadagnare

Questo e’ il terzo di una serie di 4 articoli intitolati “Concetti Chiave per un Corretto Comportamento nel Trading – Una guida ai concetti rilevanti per un trading di successo in un mercato governato da High Frequency Trading (HFT) e Program Trading”,  focalizzato sui concetti piu’ importanti che ogni trader dovrebbe capire profondamente allo scopo di sviluppare un corretto approccio al trading, in un mondo dove la maggior parte del volume di trading e’ generato attraverso programmi computerizzati.

Ho scritto una introduzione all’eBook (al momento solamente in lingua inglese, ma presto la tradurro’ anche in italiano) con le prime due parti intitolate “The Bandwagon Theory” (“La Teoria del Carro Musicale”, solo in inglese, ma sara’ presto tradotta) e “The Dangers of Asking “Why?” (“I Pericoli nel Chiedersi “Perche’?“, che invece ho gia’ tradotto). Qui sotto vi propongo la terza parte “Fatti e “Verita'” Non Fanno Guadagnare” e continuero’ a lavorare alle altre sezioni dell’eBook. Sto anche lavorando sulla sezione piu’ importante che illustra un’applicazione pratica della Teoria del Carro Musicale usando il grafico con i dati giornalieri del cambio EUR/USD. Questa sezione intitolata “The Psychology of Trading: the Bandwagon Theory illustrated” (“La Psicologia del Trading: la Teoria del Carro Musicale Illustrata”) sara’ solamente inclusa nel mio eBook che rendero’ disponibile sulla pagina dedicata del mio Blog). Questa serie di articoli e’ introdotta qui (introduzione al momento solamente in lingua inglese).


I trader che spendono il loro tempo scavando nei fatti che i governi, le banche centrali, le societa’ e i servizi di news pubblicano senza sosta non avranno successo nel trading come quanti imparano a focalizzare l’attenzione e capitalizzare su come il pubblico ed il Program Trading reagiscono a quei fatti cioe’, in definitiva, ad osservare il comportamento del prezzo. In effetti, solo il gruppo di trader guidati dalle emozioni (la maggioranza) reagisce alle notizie economico-finanziarie. Infatti durante il rilascio di tali notizie il Program Trading continuera’ solamente ad eseguire le regole codificate all’interno dei programmi computerizzati e dei relativi algoritmi, che non sono affatto interessati ed influenzati dalle news. Naturalmente la percezione e/o reazione della massa ai fatti potra’ e certamente non sara’ allineata alla realta’ dei fatti riportati nelle notizie. Questo e’ il motivo per cui il Program Trading non trada le notizie (invero alcuni programmi di High Frequency Trading lo fanno) e tipicamente quando sono attesi eventi di una certa importanza capaci di generare alta volatilita’, i programmi sui timeframe piu’ bassi (ma non tutti) sono inattivi. Ci sono periodi in cui la reazione alle notizie puo’ essere anche diametralmente opposta a quanto i fatti implicano, cosa che spesso produce uno stato di ancor maggiore confusione e prostrazione tra i trader principianti.

L’incredibile focalizzazione sulle notizie ed i fatti sui quali alcuni servizi di segnali sui mercato e ‘professionisti’ basano i loro ‘sistemi’ di interpretazione delle notizie genera un’idea molto diffusa, quanto sbagliata, che imparare a interpretare le notizie e’ importante ed addirittura fondamentale per prevedere (ma sarebbe piu’ corretto dire indovinare) la direzione del mercato. Il potenziale di guadagno nei mercati e’ invece nel riconoscimento della reazione del prezzo a fatti e notizie, cosa che richiede un’analisi oggettiva in relazione a quanto il prezzo sta gia’ facendo.

Chi non ha mai assistito ad un’azione o un futures sugli indici scendere repentinamente a fronte di notizie positive, mentre altri mercati salgono sull’effetto di notizie che appaiono dannose? In essenza il trader di successo deve venire a patti con il fatto fondamentale che solamente capire le persone e cosa le muove e’ cio che conduce ad un trading profittevole. Quindi invece di investigare le effettive “notizie”, cioe’ la storia che viene raccontata alle masse, la giusta domanda e’ “come pensiamo che le persone risponderanno  o, meglio, stanno rispondendo a queste notizie?”. In relta’ e’ anche molto meglio non andare cosi in dettaglio e cosi lontano nel cercare di interpretare la risposta delle persone alle notizie rilasciate, come vi dimostrero’ se continuate la lettura.

Perche’ a volte i mercati disobbediscono totalmente a quanto implicato dai fatti e/o dalla logica? L’importante verita’ e’ che la realta’ non ha importanza nel mondo del trading e degli investimenti. E’ la percezione della realta’ che e’ importante ed, in effetti, e’ la percezione da parte delle masse e da parte della cosidetta smart money, e non la percezione del singolo trader. Inoltre la percezione della massa e’ spesso molto differente in relazione alla stessa tipologia di notizia in diversi momenti e stati dell’economia, fondamentali economici, nonche’ sentiment e pattern tecnici che sono gia’ in atto nel mercato. Quanto appena detto e’ spesso difficile da accettare perche’ richiede l’accettazione del fatto che un trader non ha alcun controllo sul mercato. Ma d’altra parte cio’  e’ anche meglio, perche’ rilascia a disposizione del trader tempo e risorse per focalizzarsi sull’aspetto piu’ importante: le dinamiche di prezzo.

Ci sono momenti in cui la “verita'” (ovvero i fatti che la implicano) e la percezione delle masse saranno identici e perfettamente in sintonia. In altri momenti la verita’ e la sua percezione saranno completamente opposti. Nei timeframe piu’ brevi la verita’ non vince sempre. Si potrebbe certamente obiettare che la percezione delle masse e l’effettiva realta’ non possono rimanere fuori sincronia per sempre, e quanto vero in ultimo prevale. A parte il fatto che la finanza comportamentale mostra che le credenze possono influenzare la valutazione di cio’ che e’ reale, cioe’ il prezzo percepito come quello corretto di un mercato o di un’azione, i trader non hanno il lusso di avere molto tempo a disposizione. Il successo di un trader dipende solamente dalla corretta valutazione delle dinamiche di prezzo, del cosiddetto “qui e adesso“. In un tale contesto la verita’ spesso non conta.

Credere che il mercato risponda a cio’ che e’ reale e vero e’ un’assunzione erronea che genera ogni anno milioni di dollari di perdite tra i trader meno esperti. La verita’ e’ che i contratti futures, le azioni, gli ETFs, le commodities e gli altri mercati salgono e scendono non in base ai fatti, ma in base alle credenze dei trader. La realta’ non ha importanza, invece ne ha molta la percezione della realta’. Quindi quando un trader compra un contratto futures o un’azione cio’ che sta realmente comprando sono le persone e le loro credenze su quello specifico strumento finanziario.

Van Tharp dice che noi “non tradiamo i mercati, ma le nostre credenze sui mercati“. In effetti quando un trader rischia soldi in un trade, questi sta scommettendo sulla conoscenza di come le persone, gli investitori, i trader professionisti e le masse percepiranno il prezzo dell’azione in quel mercato nel breve termine. Ai nostri giorni possiamo anche aggiungere che il trader sta scommettendo su come il Program Trading reagisce e controlla alcuni mercati azionari e futures caratterizzati da alti volumi. Questo perche’ e’ la psicologia delle persone e, sempre piu’ spesso il Program Trading, che muovono i mercati in una direzione o nell’altra, e non certo i fatti. Un fatto o una storia non hanno mai mosso il prezzo di un mercato e mai saranno in grado di farlo.

Un altro punto importante e’ che i mercati sono anticipatori in natura, cioe’ i mercati provano a muoversi sulla base di quanto accadra’ e non di cosa e’ gia’ accaduto. I fatti e le notizie sono avanzi del passato e dicono molto poco di quanto accadra’ domani. Questo e’ anche il motivo per cui i professionisti hanno la tendenza a “comprare la voce (il pettegolezzo) e a vendere le notizie (i fatti)“. Come i trader e gli investitori nel complesso interpretano i fatti nel contesto delle condizioni correnti e’ la realta’, la vera forza che guida i movimenti dei mercati. Questa e’ la ragione per cui i mercati possono dipartire dalla logica – il fenomeno ricorrente che rende il trading un’attivita’ cosi difficile. I trader dovrebbero scommettere su come altri si sentono con riguardo ai mercati. Perche’ sono le persone e le loro sensazioni che, in ultimo, muovono i mercati. Le persone, grazie al libero arbitrio, sono molto piu’ imprevedibili di ogni altra entita’ esistente.

Ai nostri giorni le cose sono ancora piu’ complicate ma, in realta’, quando il trading viene messo nella prospettiva di quanto fatto dai professionisti, le cose sono in realta’ piu’ semplici. Mi spiego: i fatti sono ‘noti’ molto prima che vengano annunciati e sono gia’ riflessi nel prezzo. La presenza del Program Trading ha l’effetto di impostare dei pattern tecnici che riflettono e spingono il prezzo in una direzione che sconta i fatti, rivelati pubblicamente nelle notizie economico-finanziarie, con giorni e spesso settimane in anticipo. Quando le notizie vengono annunciate esse tipicamente contribuiscono a completare i pattern tecnici che sono gia’ in atto sui mercati e, in particolar modo, sui timeframe piu alti come il settimanale e il giornaliero. Le notizie, tuttavia, possono influenzare il prezzo sui timeframe piu’ bassi (ad esempio, sui grafici a 4 ore e 15 minuti). In conclusione, il trader e’ invitato ad assumere e costruire una propria credenza che le notizie, i fatti e le verita’ non sono importanti per un trading di successo. E’ molto meglio capire come programmi computerizzati specializzati su vari mercati tradano il prezzo ed il trader dovrebbe essere in grado di derivare o arrivare a conoscere le regole che tali programmi usano sulla base dell’osservazione del prezzo, perche’ le notizie muoveranno sempre il prezzo nella direzione che completa il pattern in atto.

Per simili ragioni, il fading delle news, cioe’ tradare nella direzione opposta a quella suggerita dal carattere della notizia, e’ anche molto pericoloso. Ad esempio le notizie relative al mercato forex, siano esse apparenti o reali, precedono in modo immediato un forte rialzo o una spirale al ribasso. Questo accade perche’, in generale, la notizia e’ il mezzo di acquisizione di informazione maggiormente accessibile ai trader, ed e’ fornita e riportata da rispettabili istituzioni che sono generalmente considerate ‘affidabili’. I forti rialzi e le spirali al ribasso spesso durano per 15 o 30 minuti o periodi piu’ lunghi nei giorni degli incontri della FED o BCE. Dopo questo periodo i trader assisteranno ad un lento ritorno ai livelli tradati prima dell’evento e la struttura del prezzo rientrare in area e soglie che si possono identificare studiando le regole del Program Trading.

E’ piuttosto buffo, ad esempio, sentire che, da un punto di vista storico, molti trader determinano il prezzo atteso del Dollaro Americano (USD) sulla base delle paghe dei lavoratori non agricoli che sono rilasciate il primo venerdi di ogni mese. In pratica, tutto cio’ che un trader deve fare e’ prestare massima attenzione a quando una notizia viene annunciata e non quali sono i numeri effettivi. Le notizie sono rilevanti solamente quando contribuiscono a rompere significativamente le sequenze di movimenti misurati indotte dal Program Trading sui timeframe piu’ alti, cioe’ il giornaliero e soprattutto il settimanale. Ma molto raramente le notizie sono capaci di produrre questo risultato. Cio’ che puo’ davvero invertire la direzione del mercato e’ solo una partecipazione forte e coordinata tra smart money e/o banche centrali. Ad esempio, l’indice S&P500 e’ stato risollevato per due volte negli scorsi 3 anni grazie all’intervento della FED con le iniziative di Quantitative Easing: la prima volta nel marzo 2009 e la seconda nel maggio-luglio 2011.

Dunque quando si ha a che fare con le notizie, le indicazioni sono: 1) capire il pattern tecnico creato dal Program Trading ed attualmente in atto; 2) prendere profitti parziali prima delle news; 3) sapere bene quando le notizie vengono annunciate e non provare mai a tradare durante questo periodo, meglio sospendere il trading; 4) rincominciare a tradare il giorno successivo nella direzione del pattern tecnico gia’ in atto, se non e’ stato gia’ completato dalle news (cioe’ il target e’ stato raggiunto a seguito degli spike prodotti dalle notizie), o aspettare semplicemente che il target sia raggiunto.

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Filed under Articles, eBook, Italiano (Italian language), Trading Method, Trading Psychology

Article: Facts and “Truth” Do Not Make Money

This is the third of a series of four articles titled “Key Concepts to Correct Trading Behavior – A guide to relevant concepts for trading success in a market governed by High Frequency Trading (HFT) and Program Trading”,  focusing on the most important concepts any trader should internalize in order to show a correct trading behavior, in a world where the majority of trading volume is generated by computer programs.

I have written an introduction to the eBook and the first and second part of it, titled respectively “The Bandwagon Theory” and “The Dangers of Asking “Why?”“. This week I present the third part titled: “Facts and “Truth” Do Not Make Money”. I will keep working on the other sections of the eBook. Notice that I am also working on the most important section that illustrates a practical application of  the Bandwagon Theory, using the daily chart of the EUR/USD forex cross (the section ‘The Psychology of Trading: the Bandwagon Theory illustrated’ will only be included in my free eBook that I will make available on the home page of this Blog). This series of articles is introduced here.


Traders who spend their time delving into the facts that governments, central banks, companies and news services ceaselessly put out will not be successful like those who learn to focus and capitalize on how the crowd and Program Trading react to those facts, i.e. learning to observe price behavior.  Actually only the crowd of emotionally driven traders will react to news. In fact, Program Trading will just keep executing the rules encoded into the computerized algorithms and will not be affected by news at all. Of course the crowd’s perception and/or reaction to the facts can and will be out of sync with the reality of those facts. This is why Program Trading does not trade news (although some High Frequency Trading programs may still do that), in fact, usually programs operating on the smaller timeframes are turned off when important events – capable of generating high volatility – are expected. There are times when the reaction can even be diametrically opposed to those facts, which really throw most novice market players onto a state of even bigger confusion.

The huge focus on news and the fact that some market services or ‘professionals’ base their ‘systems’ on news interpretation generates a widespread but wrong idea that learning to interpret the news is important and even fundamental to forecast (but it would be better to say guess) market direction.  The money-making potential is in the recognition of the reaction to facts and news which requires an objective analysis with regards to what price is already doing.

Who has not witnessed a stock or futures market dropping in the face of positive news, while other markets rise on the heels of what appears to be damaging news? In essence the successful trader has to come to terms with the knowledge that it is the understanding of people and what moves them that makes for truly profitable trading. So instead of investigating the actual news the right question is “how are people likely to respond or are responding to this news?” In reality it is even better to not go that far in trying to interpret people’s response, as I will show to you later in this section.

Why do markets, at times, totally defy the facts and/or logic? The important truth is that reality does not matter in the trading and investment worlds. It is the perception of reality that is important and actually it is the crowd’s and smart money perception and not the trader’s own perception. Moreover the crowd’s perception is often different with regards to similar news in different time and states of the economy, fundamentals, sentiment and technical patterns the market is in. This is often hard to accept because it requires acknowledgment that a trader has no control over the markets. But, on the other hand, this is also liberating because it releases time and resources to focus on the most important aspect: price dynamics.

There will be times in which the truth (facts) and crowd’s perception will be identical, perfectly in sync. Other times the truth and the perception of it will be completely opposed. In the shorter timeframes the truth does not always win out. It can certainly be argued that the crowd’s perception and the actual reality cannot stay out of sync forever, and what is real will ultimately prevail. Besides the fact that behavioral finance shows that biases can affect the evaluation of what is real, i.e. the fair value of a market or stock, traders do not have the luxury of a great deal of time.  Traders’ success only depends on the correct evaluation of price dynamics in the “here and now”. In such a context the truth does not always count.

Believing that the market responds to what is real and true is an erroneous assumption that generates million of losses among less inexperienced traders every year. The truth is that futures, stocks, ETFs, commodities and other markets rise and fall based on beliefs, not facts. The reality does not matter but perception of reality does. Therefore when a trader buys a futures or a stock what he is really buying is people and the beliefs they have about the traded instruments.

Van Tharp says that “we do not play the markets, but our beliefs about the markets”. Indeed when a trader puts money on the line he is betting on the knowledge of how people, investors, professional traders and the crowd will perceive price action in that market over the short-term. These days we can also add that the trader is betting on its knowledge about how Program Trading tackles and runs some high volume stock and futures markets. This is because it is people psychology and, more and more Program Trading, that move the markets one way or the other, not facts. A fact has never moved a market and never will.

Another important point is that markets are anticipatory in nature, i.e. they try to play on what will happen and not what has happened. Facts and news are remnants of the past and they tell very little about what will happen tomorrow. This is why professionals tend to “buy the rumors (perceptions) and sell the news (facts)”.

How traders and investors as a whole interpret the facts in the context of current conditions is the reality, the true driving force behind a market’s movement. This is the reason why markets can and do depart from logic – the recurring phenomenon that makes trading difficult. Traders should bet on how others feel about such markets. Because it is people and their feelings and emotions that ultimately move markets. People are far more unpredictable than any other entity in existence due to free will.

Nowadays things are even more complicated, but when things are put in perspective they are indeed easier. Let me explain: facts are ‘known’ in advance, way before they are announced, and are already reflected in price. Program Trading sets up technical patterns that reflect and push price in a direction that discounts the facts with days and weeks in advance. When news come out they typically contribute to complete the technical pattern already in place on bigger timeframes, i.e. weekly and daily. News however can affect price on the smaller timeframes (e.g. 4-hour and 15 min charts). In conclusion, the trader is invited to assume and build a belief that news, facts and truths are not important for successful trading. It is better to understand how specialized computerized programs tackle the markets and the trader should derive the rules such programs use from the behavior of price, because news will always move price in the direction that completes the pattern in place.

For similar reasons, news fading (i.e. trading in the direction opposite to the one suggested by the news) is dangerous too. Forex related news, for instance, whether apparent and/or real, immediately precede an upward spike or a downward spiral. This is because news is the most accessible means of information gathering for traders in general, and is provided and reported by reputable news institutions that are generally considered ‘reliable’. Spikes and spirals usually last for 15 to 30 minutes or longer during FOMC or ECB days. After that traders will see a slow return to previously traded levels and price structure re-enter into the areas and thresholds identified studying Program Trading rules.

It is quite cheerful for example to hear that, historically speaking most traders determine the value of the US Dollar (USD) based on the Non Farm Payroll (NFP) which is released at the 1st Friday of every month. In practice, all a trader should do is to pay special attention to when the news is released and not what are the actual numbers. News is relevant only when it contributes to break sequences of measured moves induced by Program Trading on the larger timeframes, i.e. daily and weekly. But very rarely news is capable of doing that: what can really change market direction is huge and coordinated participation from smart money and/or central banks. For instance, the S&P500 was turned higher twice in the last 3 years: the first time in March 2009 and the second time in May-July 2011 by the intervention of the FED with Quantitative Easing initiatives.

So when dealing with news the indications are to: 1) understand the technical pattern Program Trading has created and that is being completed; 2) take partial profits before news; 3) know well when news is released and never attempt to play it, but stop trading; 4) resume trading the next day in the direction of the current technical pattern, if not yet completed (i.e. targets where not reached), or just wait for targets to be hit.

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