{"id":24919,"date":"2013-03-08T11:53:59","date_gmt":"2013-03-08T16:53:59","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=24919"},"modified":"2013-03-08T11:58:35","modified_gmt":"2013-03-08T16:58:35","slug":"do-you-have-a-news-edge","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/do-you-have-a-news-edge","title":{"rendered":"Do you have a news edge?"},"content":{"rendered":"

Last night I had dinner with Ravee Mehta, author of The Emotionally Intelligent Investor<\/a>\u00a0and former hedge fund trader at Soros Fund Management, hoping to learn more about getting a real news edge while trading. \u00a0On my desk I hear my guys talking about Conviction Trades before the stock confirms their thesis. \u00a0I have worked with very experienced discretionary traders who claim to trade off of fundamentals, who I wonder whether really have a news edge. \u00a0I know many retail traders sit at home watching the Financial Media Entertainment Complex (which I write about in my next book (The PlayBook<\/a>) prop up guru after guru making fundamental-based predictions. \u00a0I wonder if too many on my desk, too many experienced discretionary traders, and too many retail traders are making fundamental plays without any real news edge at all.<\/p>\n

For example many who make news trades say, “I read everything out there on a stock.” \u00a0You drill down and learn that everything is everything that can be found online. \u00a0I am\u00a0skeptical\u00a0that this would provide a news edge. \u00a0 Wouldn’t you need to also have the best paid research, years of experience\u00a0dissecting\u00a0news events, and models to help quantify your news edge?<\/p>\n

I asked Ravee how he puts together his longer term trades, which are based mostly on fundamentals but also with a very interesting take on technical analysis that he writes about in his book. \u00a0First he considers the worst case scenario for a potential trade\/investment and what that would look like. \u00a0He builds variables\/scenarios that will prove his trade wrong. \u00a0He visualizes this losing trade. \u00a0When variables\/scenarios hit that he mapped out for his losing trade then he exits. \u00a0Also, Ravee outlines the psychology of all the players on his side of the trade. \u00a0What will they do if the stock hits XYZ? \u00a0What will each of the\u00a0sub-players\u00a0do along the way. \u00a0And as the stock changes prices he constantly reassess the psychology of those on his side of the trade. \u00a0Schooled at a legendary hedge fund he builds models to determine if his risk\/reward is sufficient for his trading rules. \u00a0If not then he does not make the trade. \u00a0Without giving away all the goodness in his book, or more of his trading strategy, the point is that Ravee has a very elaborate methodology for making a news trade, or fundamental trade.<\/p>\n

Check out his book here<\/a>. \u00a0This book was recommended to me by Dr. Andrew Menaker<\/a>, who had the book recommended to him by Denise Shull<\/a>. \u00a0Consider whether your fundamental trades employ the methodology strong enough to give you a news edge as a trader\/investor.<\/p>\n

Mike Bellafiore<\/p>\n

The PlayBook<\/a><\/p>\n

One Good Trade<\/a><\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Last night I had dinner with Ravee Mehta, author of The Emotionally Intelligent Investor\u00a0and former hedge fund trader at Soros Fund Management, hoping to learn more about getting a real news edge while trading. \u00a0On my desk I hear my guys talking about Conviction Trades before the stock confirms their thesis. \u00a0I have worked with very experienced discretionary traders who … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[2444,788,2449,4703,835,2448,2451,4706,4707,1718,653,2445,1989,4712,4690,1888,207],"class_list":["post-24919","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-daytrading","tag-edge","tag-how-to-be-a-day-trader","tag-learn-trading","tag-news","tag-prop-trade","tag-stock-market-course","tag-stock-trading-education","tag-stock-training","tag-the-playbook","tag-trader-training","tag-trading-careers","tag-trading-course","tag-trading-courses","tag-trading-education","tag-trading-school","tag-trading-stocks","no-post-thumbnail"],"yoast_head":"\nDo you have a news edge? | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/do-you-have-a-news-edge\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Do you have a news edge? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Last night I had dinner with Ravee Mehta, author of The Emotionally Intelligent Investor\u00a0and former hedge fund trader at Soros Fund Management, hoping to learn more about getting a real news edge while trading. \u00a0On my desk I hear my guys talking about Conviction Trades before the stock confirms their thesis. \u00a0I have worked with very experienced discretionary traders who ... 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