For traders the news is a critical part of dissemination. Without question this is a news-driven market. So as traders, it is critical that we are able to sift through the news and use it to make prudent and successful trades.
But how do we actually accomplish that? How do we avoid making bad trades based on false or misleading news stories?
First, it’s important to understand there are two types of news stories in our business. Political and economic.
The rest is fluff that doesn’t concern us. We don’t care about the Kardashians, the Bieber’s or the any of the jet-setting, well-to-doers.
We are looking for news that affects the markets. And the types that do so are political and economic.
Take last week for instance. Oil was in a serious drift-down. Then news broke that the leading producer countries were looking at capping production. What happened next? You guessed it. Oil is pushing $50 and smart money made some huge gains last week.
Did you? We did…
So how do you decipher the fluff from the substance?
Let’s take a look at some hard truths of the news industry first.
Honest, unbiased journalism is dead. Yes, dead. Not on life support, not in recovery, and not teetering on the edge.
It is dead.
Come to terms with this fact and you are already ahead of the curve when compared to most people.
If we honestly access the current state of news today we know there are two types of news stories. Click-bait and Agenda driven.
There is no unbiased journalism anymore. All stories fit into one of the aforementioned categories. And simply put, it’s really not the journalism industries fault.
- CNN, Broadcast News, Twitter, Facebook – Heavy Liberal bias (Agenda)
- FOX, Drudge, Twitchy – Heavy Conservative bias (Agenda)
- Broadcast News – Heavy Liberal Bias (Agenda)
- All Independent Blogs (Huff Post, VOX, Brietbart) , etc – (Agenda driven Click-Bait)
Even CNBC has become a victim. What should be a strictly financial news website/App is now a plethora of Hillary/Trump nonsense.
And there is a simple reason. And if you understand that reason you are on your way to deciphering the news to your advantage.
This is the heart of the problem. All businesses need revenue to survive. It costs money to manufacture, distribute and ultimately cash in on any product, service, or whatever you plan to sell.
Integrity, Honesty and Quality will get you little in this environment.
No one is graded on these three aspects. And no one is making money by living up to them. The money comes from agendas and click-bait. And in order to capitalize on this, media companies have to sacrifice these three virtues. There is just no way you can have success with agenda and click-bait AND honor the three virtues – Honesty, Integrity & Quality.
So there you have the real problem when trying to decipher the news; It is not news anymore. It’s marketing.
Is the story real? Is the reporting fair and truthful? It doesn’t matter.
All that matters is it pushes an agenda and people click the link.
The answer to all of this? Keep an open mind. Read everything and make your own decisions.
Never get all your news from the same source.
And most of all avoid those click-bait traps.
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