Buy the rumor and sell the fact
Trading Platform Software for backtesting & auto trading, for stock, futures and forex trading systems › Forums › Example Trading Systems › Buy the rumor and sell the fact
September 8, 2017 at 7:12 am #4848
You may think why we have selected this as the title of our article. Do you know how many traders trade the Forex industry execute their trades just based on rumors? They do not think of anything and when they heard of anything regarding the market conditions, they simply place their trades. It is the saying that has been used in Wall Street for hundreds of years. In this sentence, we are only telling you that many traders simply lose in Forex because they give more importance to rumors and less importance to facts. It is not only common in Wall Streets, but also in the investment world. Among the professional investors in the United Kingdom, this saying is also very much popular. We are going to explain it by details in our article.
What does it tell?
It simply tells that big traders in Forex industry do not trade the market based on the news that has been just released. A lot of news is being released every day about the financial and investment world. If you look into the website, you will find that these websites are telling you about every detail that has happened. If you believe all of these rumors as true, that is when you are relating yourself with the saying, “buy the rumor and sell the fact”. You are not checking if the news that you have just heard is true or false. The big and master traders do not simply trade on rumors, they do the opposite. They trade on the fact that how the market can change on the rumors where most traders believe the rumors and trade. Pro traders’ trade based on their experience of market trends and their knowledge when other traders simply trade based on their expectation of the market rumors.
Not all rumors are true
Not everything you heard in Forex is true. You may see that one website is telling that the price of Euro has fallen when you can clearly see that it was in one of the highest peaks in your online trading platform. Websites and Forex brokers can also give your false information as rumors to manipulate the market. Big and experienced traders know this and that is why they do not trust the market rumors. When common traders are buying the rumors, trading on based on rumors, and selling the real facts of Forex industry, the experienced traders are doing the opposite and trading based on facts, not rumors.
What to do?
If you are considering trading as your full-time profession then you need to use your intellect and trading skills. All the expert traders trade with the professional broker like Saxo by using their trading knowledge and analytical skill. They simply do their technical analysis in the higher time frame so that they can spot the possible trading spot. But doing the technical analysis will ensure your profit factor in the online trading world. You need to learn the fundamental analysis also. This section deals with all the economic news release of the market. Most novice traders follow the technical analysis only but without having the perfect knowledge of fundamental analysis you will never succeed in this industry. You will be always reacting to the rumors of the market. But once you develop solid trading skills then you will easily understand the difference between rumor and fact. You won’t have to depend on other traders since you every bit of information of this vast financial market will be crystal clear to you.
Summary: The more you will learn the better you will understand this market. At your initial stage, you might get frustrated with too many losing trades. So if you are new to this market then make sure that you are not trading with real money. Trade in a demo account unless you gain enough confidence to trade the live market.
You must be logged in to reply to this topic.