MATK was also another pre mkt gapper. I won't kid you, this sucker was a tough one. First of all it gaps down hard. So you're thinking it will bounce, right? And yes, it does. For two bars. It then forms a doji. A doji fer Petessake! What are dummy traders supposed to do with that? By a mind boggling coincidence I was wondering the same thing just yesterday and asked the Chairman. Here's what he said: That's pretty much what I thought so with that in mind, if you were going to go long, then your stop would have been at around $45.40. Rather wide. If you were to go short your stop would go above the recent swing high. As shown on the graph. Its important to note that there was a clear downtrend from previous days trading. In the end, this one was a very tricky sucker and if you got out with a profit, consider yourself either skilled or lucky (or both!). But I wanted to show it as an example of how to handle dojis.
VMSI was the other pre mkt gap with volume. This one was also tricky. I would have had a long bias, not only because it gapped but because on the daily chart it was at support and also you had a nice white candle at the start. Kevin likes exiting or staying in using the 5 EMA, I think I lean more towards just eye balling it and watching the prior candle's low. No question that how and when you get out is the key to this strategy.
Hi, thought I might join and post my dummy trades as well... I trade them for a few months now with very good profits... Keep a spreadsheet of the R/RW and so far I have been very happy with it. I use Qcharts (bec. I love the hotlists....) average hitrate for the last 20 trades has been as good as 70% and as bad as 35%. Drawdowns are small (so far) and profits very nice. Did only one dummy trade today, bec. of time constraints... ABS (although CM has said more than once, he does not like dummies againt listed stocks, it seems to work quite well!) BTW I like to trail the on a timeframe lower than entry, so if I enter on the 15 min, i trail on the swings of the 5 min chart and the sma 20 on that chart. Allthough some of my best profits I booked when I was away, left an initial protective stop, and just let it ride till the close...
opw, sweet dummy play. It trended very nicely. How did you find it? were you just watching pre market gaps?
Hardly look at pre market data. Just start watching at the open. However, when I find a gapper I like, I want it to go higher than the premarket high during market hours before considering it. I always trade in the direction of the gap, not comfortable (yet?) shorting an up gap... I always watch: unfilled gaps, 52 wk hi/lo, unusual volume and % risers/decliners. this one came of the gap list. One of the reasons I am using Qcharts (despite the unbearable datadelays sometimes) is it is such a pretty, nice program, and the hotlists are priceless. If only IB would buy Qcharts and put some timely data behind it... This one came of the gap list...
From your lips to Peterfly's ears man. Unless they devote an inordinate amount of resources to their charts, it will take a long time till they're up to snuff.
I would say just subscribe to tradeideas and stockcharts, stockcharts has reliable real time data very cheap, and tradeideas you can easily customize what you are scanning for. Good luck to all.
I tried Trade Ideas, and think they made a really cool app, but I just like to keep a list, and as far as I know you can not do that in TI. Guess I just like the Qcharts Hotlists...
Whatever works for you...here is a stock I missed on friday. In the statement on the chart, I meant action in other equities i was following btw YELL
Kevin, I missed this one too (you can't really expect to catch them all! ) But let me ask you, why would you have been going long? Personally, those two dark candles at the beginning of market as well as the overall multi-day trend would have made me think go short. YELL was another doji btw (15 min chart)