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Posts Tagged ‘gap days’

Chevy Chase at his finest.

Round and round we go. Market bottom is in. Housing crisis solved. Etc, etc.

What can Mr Bernancke and the government cook up now?

We’ll just have to wait and see. The market loves to squeeze the shorts. When “they” run out of gas, re -enter until it stops working.

Meanwhile, looks like taxpayers are now officially on the hook for all the indiscretions of the past few years.

Just take advantage of the volatility and take your signals.

If the odds favor  regression to the mean, play it.

 

Gap and Trap

Gap and Trap

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In what many thought was going to be an option expiration ramp day up ended being a restrained day of measured pace.

You know the drill, summer Fridays at the office in August are for the recreationally impaired. The work is done early, then it’s party time. I hope you play by the same rules; life seems more fun this way.

The Illuminati certainly wont sit around on Friday afternoon waiting to grab two tics out of the market. It’s about getting optimum results in as focused time as you can.

See if you can pick the few bars that the big boys made the most money in the least amount of time.

The rest of the day was sideways action with a well timed stop run at the end of the day for hapless shorts thinking about a late day plunge.

Fuggedaboutit.

Secret code traders again laughed all the way to the bank.

Let me know when you are ready to join them.

 

 

10 am reversal

10 am reversal

 

Git ‘er done, go play.

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If your system understood that today was a trend day wire to wire, congratulations, you made a lot of money. These days are even difficult for many professionals, because they defy gravity and our mind tricks us into thinking the market “has to pull back to some fib number” before moving on.

Dangerous thinking indeed.

I cannot stress enough how knowing the difference beween range days and trend days is so critically important to my success as a trader. Scalping against the trend can get you a few points, but ultimately is a losing game on these one way days.

Gap up or down days sometimes pull back and fill or partially fill the gap. On days when they do not, they will easily wipe out 5 days of gains if you fight it. They will destroy you financially if you “average” into your position.

Been there, done that.

If your methodlogy cannot identify the days when the odds favor the market moving away from the gap at the open, you are still missing a vital insight into how the markets really move. Read Jesse Livermore’s observations to grasp his philosophy on the folly of adding to losing positions.

If you have the correct stop and it gets violated in the first 30 minutes after the open, then reverse and get swept along to obscene profits. The rest of the stubborn traders who cannot turn on a dime will keep handing you their money.

Yeehaa!

 

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