Waxie talks about "his" 10:00 AM rule. For any of you who have subscribed to his room; What is this rule? Is it just that the market frequently reverses at that time? Is there more to it? Thanks
if i recall it correctly, if the market opens gap-up and stays there, you can take a long position only after 10am but not before.. Paul
It's the same as EVERYONE's 10am or 1/2 hour or 30 minute or whatever you want to call it rule. You don't enter on a gap open (up or down) and wait out the first half hour. Then you consider trading in the direction of the gap if it breaks out/down from the intraday high/low (depending on which way it gapped) of the first 30 minutes. Reason: lots of times orders stack up pre-open and specialists/MMs take advantage of that concentration of orders. The price gaps in the direction of the order flow and then once the pressure is relieved, it often pulls back. It all usually happens within the first 15-30 minutes after the open. Waiting it out lets you assess things better. Only reason to not do this is if you think the gap is a head fake and you're planning to fade the gap.