well than maybe you just should have titled the post, "wah, i lost money". The point I was trying to make is that no system is fool-proof. Bottom-fishing, knife-catching, or anything else you want to call it can be dangerous as you found out today. Your "metrics" might not be fool-proof either. Is your system 100%? Is everytime you get screwed by it an instance of trading on "illegal, inside, non-material information by the big boys"? The sooner you come to grips with the fact that your system will produce losers from time to time, the happier and more profitable you'll be. I'm not trying to bag on your system or style of trading, however, if you want to run with the big boys, you need to start acting like one. Save the "wah" for the wife or the dog.... Good luck and happy trading!
The Homebuilders are the best, day before the major earnings reports they sell off, gap down the next day on earnings and bounce as the players cover. I have observed this to be true almost every "dissapointing" earnings number since the first occurence with DHI back in 2nd half of 2004. It has become so predictable that I called the morning bounce this past report in early December. Too bad I slept in and never capitalized on it. I will never forget WLT afternoon run back in the spring. Someone really wanted some stock and paid up 1-2 points for it without a care. 40 min after the close they raise guidance, stock gaps next morning does big block prints and sells off. Pulls back for like 2 weeks in fact, guess someone wanted to scalp some big blocks. It's so blatanly obvious sometimes, it's sad.
The first time I actually wrote to the SEC for kicks. Obviously zero response. I missed the last obvious homebuilder bounce since I slept in but played the previous one cause I had a hunch. I think that trick is over but you never know. It's just a phenomenon I observed in homebuilders, probably a certain hedge fund(s) that tends to play the earnings play with their inside info for very lucrative gains. They obviously get more than just early numbers, Im sure they have well researched perceptions of the Street as well. I just think it's funny how it has happened so many times in almost the same manner. The WLT one was great for me, that was a lot of fun to go along on the ride of heavy speculative buying. I got caught in the gap & crap though, I really thought some mutual fund would actually keep pushing on the guidance and keep buying on the public info.
It really gets me that almost every IFO release out of Germany is immediately preceded by insiders front-running the reaction on Eurex. Sometimes the exact number is leaked to all the futures brokers half an hour beforehand, so I know people are getting this number early. I can only imagine how you boys must feel when this stuff happens, but... It is not optimal to prevent every crime in the world from ever occurring; therefore I think you have to accept that this is going to happen. Just try to be wary of it and hope that the perpetrators are brought to justice one day!
I just think it's fucked up that the little guy will get raped if he gets caught ( and most likely will get caught). The big guys arent the only ones who can get insider info, it's the execution of it.
makes you wonder whether those "great" traders you read about are really just getting tipped off with info. (e.g., is SAC really that great given they front run broker upgrades and downgrades?)
This happens all the time. All I do is fade big moves and know that if a stock is moving quickly there is news somewhere. Period. I only fade stocks that make moves if I know why it is moving. Otherwise I don't trade it, although 80% of the time they still work. I learned the hard way by getting screwed on insider stuff. Truth is, the only reason there is a market is so insiders can screw everyone. Why else would their be one??? Why would GS be around if they could not guarantee a profit??? It helped me a lot when I just took that as the "lay of the land". John