Perhaps the most important factor to the day-trader is the ability of these markets to process information quickly. Again, experience being the great teacher it is, you can see clearly in a short time whether a market is responding in a timely fashion to changes in important information regarding that market. Based on these considerations, the Chicago Board of Trade's 30-year Treasury bond market is a good market because it has great liquidity and is perhaps the most efficient of all markets. Not only is information processed quickly, but the ability to get immediate price information and excellent trade execution also makes this a prime candidate for this day-trading technique. The event Event-based trading means taking advantage of an important upcoming event with the hope it will create an impetus to increase market volatility dramatically.
Events are plentiful in the bigger and more-liquid markets.
The art of using this information is assigning some form of a priority to the events that will occur in the near future. Use the dates of important information releases that are bound to cause market moves as a primary basis for timing these trades. In the bond market, these are plentiful and, in many cases, will create the market follow-through you are seeking. When the markets appear to become indecisive and choppy, many traders look for confirmation regarding future direction of the market, and the influence of these events rises dramatically. It is your job to determine the event's significance by paying attention to the general mood of the markets.