Wait another year, or at least a few months, for a buying opportunity. What you will get now is at most a bounce, something to eventually sell into.
Shorting a down open would be borderline suicidal. Buying a big down open would have been by far the best setup possible. Fading the open today was good for a little trade, but when the market this crazy you gotta start looking for the big money trades. These are the times when you make large chunks of cash trading.
A big flush down at the open would have cleaned stuff up better for an easy trade, but I think the worst is over and the market has pretty much already priced in a ton of downside risks to the economy. We were pricing in almost nothing to the downside a few weeks ago and now we've decided to price everything in lol. :grin:
22 points on the ES was "good for a little trade" in 15 minutes of work? lol. The only trade that gave you the risk/reward to go 50:1 leverage this morning was fading a gap up. Try doing that on a gap down and you get carried out, even if it starts working later in the day.
yeah i don't trade on that much leverage. i couldn't trade on that much leverage. lol i'd be broke. too much pressure and stress. clearly, if you are on that much leverage then you can't swing as much. i can have some pretty wild swings in my p&l lol. that being said the best possible setup would have been a 200 point dow gap down and then a rip down on the open for capitulation and rally. people would have been blowing crap out left and right. basically what happened before the market opened...but we couldn't trade it oh well. so did you trade the futures or the spy?
Futures for daytrading. Looking for capitulation is tough, no doubt the reward is great, and a bounce is coming eventually, but the room you need to give that is what kills the trade for me. A couple guys I talk to got caught looking for capitulation yesterday. I did try to go long a little this morning after the flush but it just didn't get low enough. Compared with the morning fade where you needed to give it 2-3 points tops, that is almost a riskless trade where you can really size in.
Capitulation yesterday? Wow that sounds like a tough play considering how orderly the selloff was until we had that point drop after lunch and bounced at 112 on the SPY. Capitulation is associated with total chaos and we didn't really have any of that. Well we had some of that in the preferred stocks, but nothing completely obscene. Anyhow, I am an idiot cause I only made money long yesterday and I some how screwed up my shorts on the banks. It was so bad it was spectacular. But with my longs I knew it would be very hard for any sort of major reversal to happen cause of all the resistance and general selling pressure within the market. I made sure to take profits on the way up and not be a hero and expect a major rally. I had a really good day yesterday and a much better one today. I think my account is up like 33% in the past 3 days. I wish things were this volatile all the time.
i dont know how the market could tank again today but man if we get to lows then look out. things feel weak and no one wants to step up to buy. we'll see how things finish.
At least for a few minutes apple was the most valuable company in the world. And to think steve jobs did this in essentially fifteen years is amazing.
Going the opposite direction of the gap. Fading this morning's open was a short, which gave you minimal pain. A fade is a daytrade looking to take advantage of the first move of the day, usually lasting the first 20-30 mins. The best fades occur when the market is making strong directional moves, and gaps in the opposite direction. For example, we have obviously been making a strong directional move down the past week, excluding today. So when we gapped up last Friday(on the jobs number) and today, it was easy and obvious fades.
Basically we gapped open higher after extreme weakness the prior day. He got short expecting the higher opening to fade lower. Does that context make sense? It is a good trade to have in your toolbox. The simple mechanics of the trade are this...you are treating the gap open higher into resistance areas as a counter trend move. With the extreme weakness any people that were still long would be looking to use this higher open as an exit for any long position....aka resistance. The market began to sell after opening and bumping into resistance and sold down until we hit the post market consolidation of the prior day. That area represented some support and we bounced from there.
