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Wednesday, 13 February 2013

Will you trade on a news ?

Readers, I have warned my readers several times not to trade on news. Majority of the times the trade will be losing since the market normally reacts ahead of the news and any knee jerk reaction will always be traced back.

Below is the behavior of L&T today when IIP data was announced. I have seen several times in the past L&T bouncing back after negative IIP data. History repeats. Those who have gone short on L&T on the negative news had to square off on loss.




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