The financial markets frequently react with large price movements after the government and private agencies release their economic reports. One money manager decided to find out, and here, he shows how monitoring the reaction to those reports can be a profitable endeavor. Markets are driven by the fundamentals.
Stock traders look at earnings reports and commodity traders look at crop estimates.
Bond market participants track economic reports, issued by government and private agencies, to estimate the strength in the economy that will ultimately drive interest rates. As traders scramble to decipher the meaning behind the most recent government reports, markets frequently exhibit greater than average volatility. Here's a new trading methodology called event trading , which is a systematic way to capture the large price moves commonly associated with economic data. 5 year subscription to Working Money. Free book selection.