trading on the momentum of the move not the moment of the news

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Permalink Reply by Adam Horak on September 5, 2008 at 1:11pm

looking at today’s non farm payroll number we can see a clear cut example of what I often refer to trading on the momentum of a news event not the moment of the release; non farm payroll came in today much lower then expected at -84,000 and a surprise increase in the unemployment number from 5.7 to 6.1 percent... with such a drastic increase in the unemployment number traders initial through would be to push the greenback lower; however just moments after the news was released the dollar rallied... snapped back and the dollar began to sell off on the weaker than anticipated data, this is the momentum of the trade, increasing volume, price testing and pushing through near term levels of resistance this are a couple key factors on trading off the momentum of the news.

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