I only use the news to trade when I feel a stock is being pumped. This is probably on 5% of my trades when the volume is ramping up. Pump and dump schemes are the oldest game in the book. It is interesting that gangsters get racketeering charges for this, but it is okay when large brokerage firms do it. I guess because it is creating a mass economy and it makes money for those at the top of the food chain.
News stations, analysts, Cramer, and Stocktwits are all “fake news” to me, but are still useful in that they create buzz and volume in trading among retail investors. These venues remind me of clowns all making me laugh at the ludicrousy of how people chase the news. They do nothing but gossip and act like they are some authority, but everything they say can already be found from a company’s website or from SEC filings. They are good at getting the retail masses all wound up and that is what I find useful.
The only thing stock market news venues are good for is pushing retail investors to enter late into the trading game when price action has already moved a stock. You may make some profit, but you are not going to get rich off what the media tells you since most of the price action has already happened. If you try to day trade or chase on what they say, you will most likely lose. If I am going to gamble in this game, I want to make sure the probabilities are more in my favor, that means not following the crowd to the slaughter.
Analysts that work for large brokerage firms are extremely deceitful. These firms are all making their bets behind closed doors and then put out news releases with the intent of other firms or retail investors getting sucked in. The SEC is aware of this and has put some rules in place. To me is still reeks of larger scale pump and dump schemes. Most of the time the stock has already run up prior to their news release. They then put out a release giving a price target while at the same time they are most likely selling. This is done so retail and other investors will buy as the firms are off loading these stocks. They use computers that are tied directly into the network that snatch trades before you can even blink an eye. It is also done so that the computer looks like it is trading as a retail investor and not enormous blocks of trades. Money thus transferred from dumper to dumpee. Oops, I meant investor.
Of course, this is only speculation. It is true though that retail investors, like myself, have the cards stacked against us because of the big firms. You not know if these firms are long or short in their investments. You will never see their trades since the computers they use can trade in increments to make it look like mom and pop retail investors. You will never be able to trade as fast as they can.
Regarding Jim Cramer, I can only take a few minutes of him. He reminds me of the toy monkey that claps cymbals together to get you to look at him. He is very smart. He makes most of his money as an entertainer, not a trader.
Stocktwits, this is nothing more than twits and pumpers chasing price action. The only thing I find it useful for is the earnings calendar area. Everything else is just noise, people trying to sell some system, whiners, kids, paper traders, bots, spammers, those who chased stocks and lost money. There is absolutely nobody worth following on the site and I take everything with a grain of salt since you have no clue who/what is behind the avatar. It is entertaining and that is about it.
I am realistic and understand that I am at the bottom of the food chain as a retail trader. I really am grateful for any crumbs left behind for me. I will make no apologies for taking someone else’s money. Like, me you are in it to win, loss is part of it. If you are a smart trader, you will ride the trends and figure out how to pick stocks way before the news gets wind of it. That is easy and is nothing more than screening for price action. When the news does pick it up, it is the icing on the cake if you are in the trade.
So, this is the only reason I keep an eye on the news. I do not waste much time on it and spend maybe 5 minutes before the bell to see what the pump of the day is or if a stock I am trading has made it in the news or if I find an interesting pump.
Price action is most important for me. Most of the time these good news stocks have already run up before the news is released. I wait for their highs and a trend reversal. I will usually place spreads in the bearish direction if the price action is still worthwhile to me. I do the opposite for stocks that have been run down. Those I am more careful with. If it is legitimate news and a company is possibly in the process of solvency then I will leave it alone or short it based on a few fundamentals. Most of the time I will just leave it be.
This mentality works in either bull or bear markets as long as you also keep the overall trend of the market and stocks in mind. There are many things going through my mind before I place a trade. I’ll ramble about that later.