morning fakeout

Discussion in 'Trading' started by chuckybrown70, Feb 25, 2009.

  1. hello, i am new to the board. been reading the site on and off for 3 months, which is also how long i have been trading. i have a bunch of questions and was wondering if anyone could give me some insight.

    any help would be greatly appreciated.

    these are general observations:

    1) why in the morning does a stock flash in the one direction then move the opposite - i call it the morning fake-out?

    2) why when earnings come out positive the stock trades down in the after market?

    3) does anyone trade earnings reports, if so any strategies or insights?

    4)does anyone use etrade? if so is there an advantage to "market trader" or "etrade pro"

    5) if you think a stock is going to have a big move would you buy options instead of buying the actual shares?

    6) is there an advantage to trading the aftermarket or is it to risky?

    these are some basic questions i have been trying to get a handle on. THANKS AGAIN for any help.
  2. NoDoji


  4. nodoji - thanks for being candid and helpful. this fake-out thing is what i am most interested in. it comes in many forms, from the after market, to the pre market to the futures, to this misreporting of news, to kramer, to every other thing.

    i am having a heard time deciphering all of this mis-information.

    not sure how long u have been doing this, but maybe u or some other people on the board have figured something out that i have not in regards to this fake-out phenomenon.

    any thoughts


    You should know that there are really only two patterns: continuation of the trend and reversal. You have to decide where that is based on time frame, risk, etc. Many traders will not trade until the first half hour has passed. The reason is as the poster said. Most markets will gap up or down from the previous close and then continue or reverese from there. I find this to be the best time to trade as if you are right and put a good position on you can be done by 10:00 am.
  6. thanks. very interesting articles