Headlines don't move markets, order flow does. You probably saw the news that FedEx (FDX) is suing the US government for a tariff refund. My phone blew up with alerts. But honestly? I don't care about the legal arguments or the long-term implications. While analysts like Sarah Chen are probably digging through the filings to see how this affects Q4 earnings, I'm glued to my 5-minute chart. Because the news is just noise; the market's reaction is the signal. This is a classic setup, and it’s one of the best ways to use price action to find clean entries when everyone else is panicking.

When a big headline drops, it's pure chaos. You get algorithms firing, retail traders panic-selling, and FOMO buyers jumping in blind. It's a mess. Trying to trade based on whether the news is 'good' or 'bad' is a sucker's game. The market can, and often will, do the exact opposite of what you expect. It can dump on good news and rip on bad news. Why? Because the initial move is just emotion. The real move comes when the big money—the institutions—decide where they want to position themselves amidst the chaos. That's what we're looking for.

This is where volume analysis trading becomes your edge. Volume tells you the story behind the price. A huge red candle on weak volume? Probably a fakeout designed to shake you out. A slow grind up to resistance that gets slammed down on massive volume? That's distribution, my friend. The institutions are selling their bags to retail chasers. The FedEx news gives us a perfect lab experiment to watch this happen in real-time.

I learned this the hard way after blowing up my first two accounts. You can't predict the news, but you can have a rock-solid plan for how to react. This isn't just theory; this is the process I follow from my desk every single time.

Before the market even opens, I have my key levels drawn on the chart for any stock on my watchlist. These are my anchors in the storm. They are magnets for price. For a stock like FDX, I'm looking at:

• Previous day's high and low.
• Major daily/weekly support and resistance zones.
• Key moving averages, like the 21 EMA and 50 SMA on the 4-hour chart.

The first 5 to 15 minutes after the news breaks is the 'stupid money' phase. Price will whip around violently. Let it. Don't be a hero. Your job is to sit on your hands and watch where price goes. Does it nuke through a key support level? Does it spike into resistance and get rejected hard? Just observe. Take notes. This is crucial information for the real setup that comes next.

This is the core of the strategy and one of the best day trading setups period. After the initial panic, you're watching for price to 'reclaim' a key level it just broke. For example, let's say FDX had key support at $250. The news hits, and it dumps to $247. Amateurs are shorting the breakdown. But then, on the next 5-minute candle, it rips back above $250 and closes there on a surge of volume. That's your signal. The breakdown was a fakeout. The big players used the news to engineer liquidity, stop out the longs, and then buy it back up cheaper. Going long on that reclaim is a high-probability trade.

My friend Alex Volkov is a master at seeing this in the options flow, but you don't need anything that fancy. The story is right there in the price and volume. This is the foundation of technical analysis for beginners and pros alike: trade what you see, not what you think.

This strategy isn't foolproof. The biggest risk is a failed reclaim. Price pokes back above the level, you get in, and then it immediately dumps again. This is a sign that the sellers are still in complete control. That's what stop losses are for. You cut the trade, take the small loss, and wait for a better setup. The other risk is psychological. If you get stopped out on that first reclaim attempt, the urge to jump right back in and 'get it back' is immense. I still struggle with revenge trading. My trade journal is full of notes reminding me to take a walk after a loss like that. Never trade tilted.

So, next time a stock on your watchlist has a big news event, try this. Don't trade. Just pull up the 5-minute chart, mark the key level that breaks, and watch to see if it gets reclaimed. See how volume behaves. It's one of the best ways to train your eye for reading the tape. Forget the lawsuit for a second—based purely on the chart, where do you see the big money drawing their line in the sand on FDX this week?