Falling knives

Discussion in 'Strategy Development' started by VictorS, Nov 9, 2006.

  1. VictorS

    VictorS

    Anyone else here liked trading them?
     
  2. Donkell

    Donkell

    Depending on the reason it's dropping I trade them for the bounce.
    But it can be very risky

    Don
     
  3. VictorS

    VictorS

    anyone else? I am to the point where I trade them exclusively.
     
  4. dac8555

    dac8555

    yeah. when there are so many stocks overextended like recently, and not many new breakouts, i will take a bounce if the indices go along with it.
     
  5. i love falling knives too, but i dont spot them often enough, how do you find them?
     
  6. VictorS

    VictorS

    haven't been finding too many lately. As a result, I am looking to get into emini trading when i don't have a falling knife positions.

    I monitor the markets throughout the day for FK's because they sometimes don't show up on end of the day scans.


    Edit: I usually hold FK's for multiple days (at least two days with $1 profit target). 2000-5000 shares depending on price action.
     
  7. bellman

    bellman

    you, my friend, are CRAZY!

     
  8. VictorS

    VictorS

    You haven't traded them long enough. By far, this is the most low risk/reward method I have utilized for last six years.
     
  9. VictorS

    VictorS

    Of course, I understand that comment. But think about this...if 90% of traders really fail,you need to do what 90% are not doing. Obviously if you trade the way everyone else does u will fail.

    Also, i don't blindly buy a stock because it's falling. It's price action, a couple of technicals, some fundamentals and institutional activity. I don't get trades everyday and sometimes 1-2 weeks with no activity.
     
  10. Yes, especially intraday overreactions and the herdz inability to disseminate news quickly and accurately.

    It goes without saying it can be deadly if you're wrong.

    I exercise alot of caution with these.
     
    #10     Jan 9, 2007