Does the Fed, or any News, Matter to Traders?
With limited test data, we can say that news matters in the short-term, but doesn’t generally have a long-term impact.
With limited test data, we can say that news matters in the short-term, but doesn’t generally have a long-term impact.
Over the years, analysts have spent countless hours looking for an edge in the markets. Much of that time has been devoted to finding new ways to measure momentum or find overbought/oversold extremes in the market.
A trading magazine recently published an article about a university that runs a FOREX fund as part of its undergrad business program. The students manage $2,500 in real money and learn how to trade.
Trading for a living requires steady returns. Equally important, and often overlooked, is that you must avoid big losses to stay in the game. Gains and losses are asymmetric and the math is well known – a 10% loss requires an 11% gain to break even; a 20% loss will need gains of 25% to fully recover.
Value investors in the stock market spend a great deal of time studying the words and actions of Warren Buffett. He has delivered amazing returns in the stock market for decades and created great wealth for himself and others.