when the news is a surprise to everyone as in a natural disaster or black swan event news traders try to position themselves to profit sometimes this means playing the volatility or making a call on the immediate directional impact of the news on current price trends 
in most cases news traders are a type of day trader since they generally open and close trades in the same day news traders tools and strategiesnews traders leverage many different strategies with a focus on market psychology and historical data traders may look at historical data for example such as past earnings reports to predict how upcoming news like an upcoming earnings report is likely to affect prices by becoming familiar with specific markets news traders can make educated guesses as to whether a security will increase or decrease in price following a news report news traders can also set up queries and alerts to gather breaking news and correlate it with changes in the price action on a chart if certain criteria are met the news trader will then enter a bullish or bearish position depending on the trading strategy as news is timely and usually short term in impact the opportunity to profit only exists for as long as the news is fresh a popular strategy used by news traders is known as fading which involves trading in the opposite direction of the prevailing trend as enthusiasm wears off a stock might open sharply higher for example after a positive earnings announcement during pre market hours news traders might watch for this optimism to reach a high and then short sell the stock intraday as optimism wears off the stock might still be trading sharply higher compared to the prior day but the traders may have profited from the difference between the highs and lows of the day 