As a technical trader, I highly heavy on price charts for my stock selection and investment decisions. Even though technical analysis is my main trading tool, I do feel it is important to follow the financial network news services because they can provide us with information the charts simply will not show us.
One way I use the financial network news services in my trading is to alert myself to announcements that are scheduled to be released in the near future. Some of the announcements I will keep track of are economic reports, earnings reports, conferences and announcements made by the Fed. When I know such an event is scheduled, I usually cut back on my trading size because of the anticipated volatility which many times triggers my protective stops. I'd much more be on the sidelines wishing I was in the market than being in the market wishing I was out!
Another effective way of using the financial network news services is to see how a particular stock reacts to a report. For example, if the financial network news services reports that a stock's earnings are bad but we notice that the stock rallies (especially in a weak market) that is considered to be bullish. The fact that this stock was able to rally in the face of a bearish report tells us either the sellers have exhausted themselves or that the smart money is picking up the stock. This is important information that you'll only be aware of if you follow the financial network news services on a regular basis.
Contrary opinion can be a wonderful tool to use in your trading and by following the various financial network news services that are available to us, we can sometimes get a good feel as to what the majority of traders are doing. For example, if I am long a particular stock and all I hear from the financial network news services is that this stock looks like it can go a lot higher, I am more likely to speed up my liquidation criteria. The reason for this is because when a trade is crowded (everyone is positioned the same way) there is a good chance that the buyers may have exhausted them which means the stock may be vulnerable to a decline. It does not mean a decline will happen, but at the very least I am now alerted to the possibility of a sell off due to the extreme optimism that exists.
Breaking news is something that catches many traders by surprise and following the financial network news services a trader can at least understand the cause behind a sudden move in the market. By being aware of such news, a trader can decide if it's worth risking holding an existing position overnight or would they be better off liquidating before the close.
As you can see there are several benefits to following the financial network news services. Even though a technical analyst will argue that all the information on a stock is already factored into a stock's price, I think it would be wise to combine technical analysis with the news. This business of trading is hard enough and we should take advantage of every edge in the market that is available to us. By being aware of scheduled announcements that may dramatically affect a stock's behavior we can better position ourselves accordingly and protect our trading capital which after all should be every trader's ultimate goal.