Let me preface my remarks here with the following:
There are many different trading methods. Do whatever works for you.
If you trade using MACD, or stochastics, or whatever technical indicator, great. Do whatever works for you.
If you trade using only price, great. Do whatever works for you.
If you trade using only price and volume, great. Do whatever works for you.
My purpose in this post is not to lecture you on how to trade; I will take the opportunity to convey what I do. BUT – Do whatever works for you.
I often read this, or something like it: trade only using price and volume. Nothing else matters, everything else is a distraction. (Let me repeat: Do whatever works for you). I read something like it on a blog yesterday, urging traders to disregard news, announcements, etc. and to only focus on price and volume (it was from a vendor of trading systems, so I will not link to it).
Now, I don’t want to upset anyone, or tread on any toes, again – Do whatever works for you. Indeed, I primarily use price and volume.
BUT … I do spend time reading news, market opinion, views, announcements, etc. these do provide an input into my decisions.
It is often said around the traps that it is not the news that matters, but how a market reacts to it. This is an idea that I think has a lot of value. Which is one reason I try to make myself aware of the current events and talking points in the market; and then assess price movement in relation to these themes and expectations.
I said I read the trade only using price and volume advice on a blog yesterday. In the comments section of that blog I read something like this: we are at present in a very headline-driven market where the ‘technical’ can get overridden, so surely it is important to pay attention to what’s going on? A very good point, too, I believe.
Alternative viewpoints are always welcome.