The impact of news on the markets is often immediate and significant.
Positive news about a company - such as strong earnings, visionary leadership, or successful product launches - can drive increased buying activity and raise the stock’s value.
Conversely, negative developments - like poor financials, weak guidance, or a declining economy - can lead to widespread selling and a drop in share prices.
When building strategies, it's useful to consider news events in three primary categories:
Company News
Company-specific news refers to any update directly tied to the organization whose assets you're evaluating. This includes:
Financial statements and earnings reports
Announcements of major business decisions
Executive changes or leadership performance
Product launches or operational updates
These types of updates can significantly affect investor confidence and influence a company’s stock price.
World News
Global events, while sometimes less predictable, can also sway market movements. Examples include:
Natural disasters
Political instability or war
Global pandemics or supply chain disruptions
For instance, a hurricane hitting the U.S. Gulf Coast might impact energy stocks. While rare, these events can introduce major volatility, so it’s important to remain alert to their potential impact.
Economic Data
Macroeconomic indicators can have a broad and powerful influence across all markets - from equities to forex. One of the most closely watched factors is interest rates.
Example:
If interest rates are cut, borrowing becomes cheaper for companies, often leading to increased investment in operations, acquisitions, and expansion. This can boost future earnings potential and push share prices higher.
On the other hand, signs of economic instability - like rising inflation or unemployment - can lead to market pessimism and falling asset prices.
How to Use News Events in Strategies
You can incorporate news-based logic in your strategies using the following keywords:
ActualData – The actual figure released during the scheduled economic event
Forecast – The consensus estimate from analysts ahead of the release
Previous – The published result from the prior occurrence of the event
These tools allow you to automate trading decisions around key economic releases.
Want to learn more?
Check out the video below to see how to build strategies using news events.
Note: All screenshots and examples are for technical demonstration purposes only. They should not be considered as recommendations for any specific trading strategy, nor do they constitute any form of advice. Please click here for further explanation