Two of them that I have used over the years are "If you trade news, you lose" and "Sell rumors, buy facts." You can reverse the Wall Street adage "Sell the rumor, buy the news" if a negative event is expected. The adage "buy the rumor, sell the news" recognizes that rumor affects stock prices, and news can have the opposite effect. Rumor buying, news selling promotes the idea of capitalizing on market movements by taking a position based on rumors in anticipation of an announcement that could cause a market move.
CFDs
With the help of financial derivatives such as CFDs, traders can use rumors by buying and selling news to bet on markets they think will rise or fall. Let's talk about how rumors buy, sell news in the stock market...and how traders can potentially use buying rumors to their advantage. Before you start trading each item, buy news, sell available news, let me share with you how our company uses this oft-repeated rule. When good news comes out and the price goes up, getting that good press release could potentially be the worst time to enter the market.
Widely expected
Too often, we see a sell-off ahead of widely expected bad news, only to see the market rally after traders have had a chance to digest it. This has led to a market where even very important news can be disappointing and people are waiting to sell, no matter what the news is. As a result, news traders focus on trading before or after the news when the stock market is still reacting to the news.
Traders
If this is the case, one trader takes some time to digest the news before placing a trade, while others act quickly when rumors emerge. Traders will close their positions days, hours before the news or based on current market conditions. When the news is finally released, all traders will buy (or sell) based on the predicted number, and the price will move in the direction indicated by the predicted number.
Bearish
If certain criteria are met, traders on the news will enter a bullish or bearish position depending on the trading strategy. Once the relevant currency reaches a high enough value for the forex trader to make a good profit, that trader “sells the news” and trades the currency at a higher price. As soon as there is news that this asset will generate more future cash flows than this asset, the investor will compete to buy this asset. This asset will only support its valuation when an unexpected news event occurs that is larger than expected in the previous rumor.
Rumors
Only one more unexpected news event, exceeding the expected rumors, will support the price of the currency. If the rumor turns out to be false, or if the currency is overbought, news that is slightly below traders' expectations will cause the currency to sell. If the rumor is false or the market moves outside of the asset such that the asset is no longer undervalued, news that is slightly below expectations will trigger a sell-off. Traders will see the item and start buying, believing that the item will eventually turn out to be real and make a large amount of money.
Price drops
If you hear negative rumors leading to news and the price drops, it often makes sense to buy before the event happens (before the news breaks). Most people would consider it a smarter idea to keep the rumors at bay and wait until the news actually comes out. Please note that since Elon Musk is good at delivering exciting news all the time, the next rumor or announcement may outweigh the current event. Please note that with the company itself, since all news and rumors are by no means a secret, this phenomenon often occurs a little earlier, with the headline going up (or down) depending on the rumors or announcements, up to a week or so from any- then expected news or events and then start receiving the news is the opposite step before the actual event happens.
Selling
Selling the news or selling the facts happens because the rumors that previously encouraged many traders to buy have turned out to be false. There is a tendency to over-emphasize what traders don't know (rumors) over what they know (news).
By familiarizing themselves with a particular market, news traders can make educated guesses about whether a stock's value will rise or fall following a news announcement. The latest news, economic reports and other reported events can have a short-term impact on the price dynamics of stocks, bonds and other securities. With derivatives such as CFDs or margin betting, traders can use the "buy rumour, sell information" mentality to bet on markets they think will rise or fall.
FDA
Basically, when investors do this, they think about what might happen to the stock, and they buy it, hoping that the price will actually go up, and then when news about that stock comes out, they use it throughout the process. Then sell when things get a little slower. Buy-after-sale hype simply means that when sports speculation emerges to acquire a company or company, the FDA may offer the FDA a drug that investors buy in anticipation of a stock price increase. If enough traders guessed the outcome, no one else would be surprised and cause a strong price reaction when the news broke.
