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Also the facts may change. Sometimes our perception of the facts was incorrect or the timing of the facts was incorrect. For example, it may stop raining. When you see that the facts have changed, it is time for you to revise any decisions you have based on those facts. |
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Markets and various stocks can move dramatically for any number of reasons such as domestic events, international events, political reasons, and financial considerations. Just look at the news media and how they always have reasons underlying the news. The way they talk, you would think that journalists know everything, but in reality that is far from the truth. Even though their job is to report the news, in many instances these reporters think they are entertainers or analysts and many times create the news, whether inadvertently or not. Everything you see on television and read in the financial press may not be exactly and contextually correct. Mass media need "telling" stories every day in order to stay in business. A story may be embellished or slanted in order to be more alluring to the viewer or reader. The journalist may have omitted certain items or only reported upon events that confirmed the angle that the broadcaster wanted to exploit. |
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You should listen to what is being reported and try to balance the journalistic coverage with your own sense of logic. A good DAET trader understands this and does not react merely on the words of a media personality. For example, if a company is mentioned favorably by someone on CNBC, the reality is that the stock may move quickly. If a DAET trader decides to participate, the trader must understand that this move may be very short term and act accordingly. The trader may get in quickly with the intent of getting out almost immediately for a small fraction, or wait for the stock to go up and then short the stock when the all too often profit taking begins. The fact that the stock was mentioned |
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