it was obvious to me that the spike down was a great long opportunity, HOWEVER, it could be tough to get the timing right. even if you recognized it as way overdone to the downside, you could have got in too early while it still headed down. to those who played the spike, what clues did you look for to see that momentum had stopped to the downside? i guess you could have switched to a shorter time frame and watched the price action, drawn a trendline, etc. my point is, say around 980 you recognized the opportunity. even though you were right, you still would have held a loss down below 975. how could you have improved the timing? thx
Oh please. Anyone who "traded" that spike today and made money was simply lucky. Pure gambling to trade a move like that, and BS to anyone who says otherwise.
nevermind.. i just looked at bar intervals less than 1 minute and there were some clues.... EDIT: for the record, i would not have watched a very small interval all day. you could watch a slower time period, like normal, but when this happened, you could have switched to a faster time period, while understanding what was happening in the higher time periods...
MY thoughts: I don't feel buying the spike was a great opportunity. The volatility was huge and to be able to make the trade with a high probability of working you would have needed a stop wider than normal. If you would like to keep your maximum $ loss the same as usual your position size would have to be scaled down accordingly. So then even if the trade is a winner the gain is average $. I know I'm a chicken.
I attempted to get long at 1230 on the NQ on the second move to 1229 but before my order was even in the price had jumped back over 1232. That was one wild minute. I used a limit order instead of my usual stop market which I think was appropriate at the time. What I wanted was to use 1223.50 as a stop loss and my entries are usually within 4-7 points of my stop. Even using 1 minute bars could not have gotten you a decent entry. AllenZ
And what clues would any chart have given you that the drop was not due to India nuking Pakistan, or President Bush getting shot or anything else that would have been "real"? The fact that it happened and was over in less than 2 minutes makes me think you've gotta be kidding that you'd actually think you could or would have switched charts, etc., and "knew" that you should go long. Seeing things after the fact is always easy.
i would just like to say.... the way most people trade, i understand why most won't agree with what i'm saying. for example, if you trade strictly jack hershey style with stochastics and macd, you have no idea of realizing what i realized today. 6 months ago i would not be saying what i'm saying now. all i'm gonna say is, when you know what's happening on higher timeframes, when something really fast happens counter to the higher timeframe, you can zoom into it and fade the move. that's all i'm saying...
i've made thousands of trades. i have a trash can in my closet full of mailed trade statements (from my Datek days).