03
The News Trader Software Review
When a company releases significant news regarding their product or services, the impact on the price of the stock can be immediate and dramatic, both up and down. Trading off of news stories is somewhat of an art and requires constant vigilance and quick timing. The News Trader (TNT) software attempts to automate this process.
Breaking it down to the key things that you need to get right to be successful with this approach:
- Is the news significant enough to impact price?
- Which direction will price change?
- When will price change?
- When should you exit?
TNT has come up with a rather clever answer to all of the above factors. First, it uses a criteria of a 3% change in the price of the stock from the time the news story first appeared to determine if the story carries some significance. This eliminates the discretionary factor of trying to figure out if the news is significant or not and of course eliminates the need to read through every story.
Secondly, this same 3% price change is watched on both the up and down side. So a 3% change in price in either direction is interpreted as a potentially big moving stock either a long or short.
Thirdly, the software starts tracking the price as soon as the story breaks. It does this by scanning press releases by companies every 60 seconds. When it finds a publicly traded company it pulls the stock price at that moment. The stock pick is then “pending”. It rescans the prices on these pending stocks and looks for the 3% price change as discussed above. If the price does move by 3% this is a clear signal to buy or short the stock.
Lastly, the software recommends a 3% trailing stop to exit. Since this is a day trading approach, any open trades should be exited at the end of the day.
The software also allows you to filter stock to a certain price range. Say for example you wanted to focus only on stocks less than $2. This is easily done with the price range filter.
Many stocks will stall out soon after you enter. This is to be expected. What you are looking for though, is that one that really takes off that you can ride up or down for a double digit winner. When you average all the small winning and losing trades with a few of the big winners, you end up with a consistently winning approach on a day to day basis.
You will need to watch your capital and allocate your funds carefully since you may have several trades and potential trades going at the same time.
Again this is day trading and no approach can offer a “set and forget” system that will allow you to trade without actively watching the screen and managing the trades, so you will have be in front of your computer while using TNT. The good news is that you can trade for just a few hours per day and still do well. Full product information and results are at the website at www.daytrading.nu.