News doesn't break that way. Anyone who has been trading for years would know that. Let's say the news event you described happened above. What happens many days if not weeks ahead is the rumor that tensions will escalate. Then one day the event actually happens. Since news does NOT disseminate simulateously to all, those with "advanced" (meaning earlier knowledge) will sell first in what would be an orderly sell off in liquid markets. By the time everyone else gets it, (the johnny come lately's) that's when you get your gaps. So since day traders are the ones taking pips/ticks/handles and their time frames being ticks to minutes, their risk of large moves is less and their size tends to be significantly smaller than a position or swing trader. The collective of which would not take out a FCM provided that exercise automatic liquidation of positions that fall below a certain threshold. Only a few safeguards need to be in place to prevent a firm being taken out by them. With today's modern systems, it's fairly easy to implement. Especially for a futures only firm. Add in naked options and things get tricky seeing as options are relatively illiquid. Not really so much for futures day traders. Maybe stock, option and, currency traders.
Thanks. Good of the firm to be proactive and prudent by putting the suspension on and taking it off quickly. Last time, it lasted for 6 weeks. That seemed a bit excessive. BTW, TWS is working out better than ever. Keep up the good work.
Where did you learn to trade, the bathroom? Catastrophic news does not leak out in a tidy manner. Anyone sitting there with their account maxed to the hilt long with $500 eminis and thinking they can just zip out, will find everyone else is stampeding out the same exits. $500 controlling approx $70,000 in a large scale way (many contracts) is called "looking for bankruptcy" in this modern inferno called 2008.
Yeah? Whatever. Anyone who has been through the major events knows what I'm talking about. Take the suprise fed action a few years ago. The market was moving before it was widely disseminated. Daytraders who don't use stops, be it mental or hard, will die long before rare major market moving events. In fact, most of them blow out when volatility edges up over a month or two from historical norms. As for the rest of us who trade using prudent money management skills, since news DOES NOT disseminate to all simulatenously, let alone being reacted to simultaneously, we're not worried because we've been there and done that. Hasta pasta.
ugh.. how about the surprise fed action on tuesday.. what was that... 60-70 handles per contract immediate spike? of course, only a fool wouldn't have been expecting a cut.. [everyone is so sure of themselves here its hilarious]
MMmm... pre-market? The convo is about daytrading and margins well below SPAN minimums. Which only kick in during RTH.
Look, for a minute there I was going to waste time proving my point. You know, the ego thing sparked in me. But then I remembered your religious postings and views in "those other threads" and realized it would be a lesson in futility. I'd like to say you can seperate a person from their religious views, but when they're way out there like yours, it tends to be an all emcompassing aspect of their life and worldview. Anyway, for your own personal amusement... go grab an intraday chart of the ES during Jan 3, 2001. Start from 12:00EST to 13:30EST. Do tick, 1min and 5 min bars. Bear in mind that the official time of the FED action was 13:15. Next, 9/11/01. Happened before market open. Check Feb 26/1993 - 1st Trade center bombing. Check from 11:30EST to 13:00EST. Bear in mind that the official time of the explosion was 12:17EST. Yeah, see? It's not an instanteous reaction because news isn't disseminated instanteously. Trade Globex without stops and get smoked. Trade with them and at most get singed - sometimes more than you'd like. Trade with stop limits that have a narrow spread between stop and limit? Generally bad idea.
Well stated. Other examples are the London bombing or even the fat finger trades that occured a couple years ago. The markets (the charts) are smarter than the individuals trading in (on) them. Use stops or evaporate and learn to READ PRICE ACTION!
Confidence comes with experience from one's ability to read price action in real-time. Here's my trading chart leading into the "surprise" Fed action.