How To Trade Breaking News
In the stock market, there is certainly no shortage of information or newsworthy events. Almost daily, you will see stocks move 10%, 20%, 50%, even 100% most trading days. To find these stocks, not only will scanners work, but if subscribed to the right sources you’ll certainly come across the headlines on the most actively traded names in the day, and why they are trading the way they are.
There are a handful of breaking news and information platforms when it comes to trading stocks, we narrowed our pick down to our favorite one based on ease of use, affordability, & usefulness. This platform is the popular BenzingaPro.Â
Benzinga is one of the quicker sources for breaking news and press releases. They have multiple feeds that can be displayed all at once, on one screen, or broken out into multiple screens. You are able to turn on alerts to feeds that you want to notified of. This is ideal for traders who like to monitor news feeds and press releases throughout the day.
Audio Feed - News Squawk Alerts
Not only does Benzinga offer the news feeds, they also have a live audio squawk feature. This is a human being on a microphone live announcing breaking news as it’s happening. Having the live audio is one of the most efficient ways for traders to stay caught up in the market activity throughout the day without being tied to any screen or window feed.
These are great features for obtaining news as a trader, but how does that help you trade stocks? Well, let’s just say, it starts with patience. Unless you like fast heartbeats, sweaty palms and blurred vision, it’s probably best you don’t chase breaking news alerts. That doesn’t mean you can’t take advantage of them as traders though.
If you are monitoring these feeds and information, you will begin to see patterns and start to recognize what constitutes as worthwhile for attention. There are thousands upon thousands of press releases every day that have the potential to affect stock price, but as traders, we must have a system to identify the most opportunistic ones.
Trading The Breaking News
When a piece of news throughout the day does catch your attention, this is when you go to work. Of course if it’s worthwhile to trade, the stock price will be volatile in action. Don’t get the fear of missing out (FOMO), instead, set yourself up for a position to succeed.
Take a bit of time to research the news – This can be a few minutes to hours depending on scope of the news/company.
Identify the validity of the catalyst – Is this a new catalyst or was this already known.
Once you have conviction on the trade through your due diligence process, it’s now time to set up a trade plan. Use the chart, and price action to determine a proper entry. Based on your time horizon of the trade, you would set a stop and profit target accordingly. Use major support/resistance levels and moving averages on the chart to help determine your levels of interest.
BenzingaPro is a great platform for traders of all types. Not only does it provide breaking news, you can use their platform to:
- Build Watchlists
- Scan for Stocks
- Screen Stocks
- Get Options Sweeps Alerts
- Get Price Alerts
- Get Detailed Stock Information
There are a ton of great free sources for information & news, but sometimes seconds or minutes can mean everything in a trader’s world. Understanding if that is a need for you or not would be key in purchasing a paltform that specializes in in breaking news. In general, it’s smart to be in tune with the market, so using a tool like this which is reasonable in cost is a great resource for a trader.
These are tips on how to think and react when faced with breaking news. The more you learn, the more you earn! If you have any questions or comments about the best trading habits and practices, feel free to use the contact form below to get in touch with us.