we had build a pattern recongition strategy on sp futures tested over ten years, started in november and it tried to short this run at about 1030. had to turn it off after consecutive losses. quite frustrating experience. did not cost too much in percentageterms but a lot in terms of psychology ... now we are flat. i failed so far to find reliable patterns to short sp futures and i naturally do not trust our current system. recently it tried to go long, but i am little afraid it just learned too much about recent history ...
you found that structure reliable? did you test it back? we did some research here but found other structures more reliable than shorting a down gap.
It was a discretionary play. But generally I agree that there are better plays than shorting a gap down. Usually I'm a buyer of down gap. But was already short form the day before. The put/call ratio was was the lowest in three and half years, the yield curve is starting to flatten out a bit and the hardest hit shares in the bear are the ones that are perking up now. A lot of retail money thinks it's 1999 again. Seemed like the right thing to do.
"The Trend is Your Friend" AND "Observe What Is Happening, and Assume That It Will Continue" Last Quote from Trader Vic Sperandeo, 1984
Today toped up on shorts. Short on SMI, DAX and DOW. Don't reply regarding trend, ect. I keep to my game plan: These markets are top heavy and there are currently no/very little protection out there in the longs. So boys and girls. Small correction might lead to a couple of hundred points down across the board. Good profits to all......
ic. i prefer longs on downgaps as well. from other posts i just had the feeling that you are part of the systematic community here.