How Affects news and how to interpret them for our investment – genxfxtrader
The news is especially useful for those operating in the short or medium term and for those who want to take advantage of corporate operations such as capital increases, dividends, takeovers, etc. Be aware of the news is basic for those who are invested, especially if we operate in the short term as these, often affect the evolution of prices on the day or week. Some even longer term
One thing is certain, the news market close are the generators of the GAPs at the opening, and also volatility in the first minutes of the session, both in Europe and in the United States.
There are different strategies to operate on news, the most important thing is to learn to filter them and know the impact they may have. This knowledge is achieved with a good theoretical basis and experienced.
Types of news that can distinguish mainly:
The first thing to know is which companies / sectors affect (or may affect) a story, it is more complex for several reasons:
Many companies have interests in other : bad news in the oil can affect an insurance company if it has a good participatory fee.
Exposure to markets / indirect products : It is clear that if oil falls benefit negatively extracting oil, but a drop of oil can have other unexpected effects such as a rise strongly in bag bank if you have a strong exposure shareholders of a company managing air transport or air navigation by increasing the margin on airlines as their main cost is fuel, or the increase in air traffic if the drop in oil prices is durable.
Are complex relationships, we often see them in retrospect, but they are fun to reason. Especially when a company falls hard for a story that does not affect you too but for some reason so many investors consider and overreact.
Some news provoke overreactions, which together with a proper assessment can produce investment opportunities, and this we must not forget.
Having a search engine asset that is fast and efficient is important, especially when we miss a story and want to act quickly, for example if they publish a profit warning (strong review of benefits unexpectedly). Thus Degiro has improved its search engine can find assets by name, ticker, ISIN code or product category. You can also refine your search with a new filter.
Many investors dismiss the news to guide their investment decisions . It is important that information or methods we use to make our investment decisions know what they are and how they are interpreted, that is to understand what we are doing and why.
We should note that there are many news already discounted in the market , as you know the information is asymmetric, meaning that there are market players who receive it before others. Who have advanced terminals receive data in real time, rather than for individual investors is more complex. Much of the news that has previously been approved by experts and agents who have already taken positions in the securities affected by the news make sudden movements occur and that we, as individuals, we ‘re late.
There is news that affects the very short term, others affecting longer term and where we can take advantage of movements and others that make markets (or specific actions) sobrereaccionen and if we have a proper assessment of a company of these, to take advantage of these market overreactions.
For example, a company with significant positive cash flows, with good diversification of its business and with a controlled level of indebtedness or no, because in a period of the year has had a specific problem and the price has fallen too, has Why affect long – term accounts, so you can become an investment opportunity.
In conclusion, be aware of the news and quick access to values is crucial when making trading and Degiro is increasingly betting on this line. It is important to have controlled an approximate value of companies in which we invest to avoid paying too much for them and know how to detect if the financial problems that could have a company could bring to an untenable situation.