When price makes unexpected move

Discussion in 'Risk Management' started by LetItRide, Jul 11, 2013.

  1. :D
     
    #11     Jul 12, 2013
  2. This is easy. The only reason to ever have on a position in the markets is when you have strong reasons to think that such a position will generate excellent returns relative to the risk taken.

    So, in this situation, you just ask yourself "is the market a screaming buy at the bid price?" If the answer is anything other than "Yes", then you should not be long. That means if you do have on a long position, you must immediately get out.

    With any market decision there is a simple test. Do you know for sure what you should be doing in this situation? If not, then you have no business having on any risk exposure.

    Another way to look at it is this: if you were flat, then surprise news caused a huge move down, what would you do? Enter short, enter long, or stay out?
     
    #12     Jul 12, 2013
  3. Redneck

    Redneck


    N.P... Appreciate the honesty


    RN
     
    #13     Jul 12, 2013
  4. always do not panic. be clam. most times just non-sense move, even true move. donot panic.

    even 1000points drop in dow, do not panic. if you justtrade 1 contract es/crude CL with a50kaccount, let the market go wild. just sit tight, keep focus on opportunity to book profit.maybe days, just wait.

    donot let those gang rob your money shake out your position!

    I did that over and over, very effective!

    each time Es drop, Ipicked bottom and a little bit early,who cares, some one just tried to give me money, why shy away or panic?

    stop loss is for losers! unexpected things are normally chances to do it contrarily.
     
    #14     Jul 12, 2013
  5. I would stay away from big scheduled news if you can and just get the heck out on unexpected market moving news. But that's just me.
     
    #15     Jul 12, 2013
  6. BSAM

    BSAM

    Get out.
     
    #16     Jul 12, 2013
  7. you were short LEAP and now you're thinking, 'should I leap from the 5th or 15th floor"
     
    #17     Jul 12, 2013
  8. I just asked a question, most people jumped to the conclusion I was clueless, caught like a deer in headlights. What if I was revamping my trading plan, or automating my plan factoring in unexpected moves which news can cause?
    To be a good trader you need to observe and not assume, most people are just so quick to assume no wonder most lose.
     
    #18     Jul 13, 2013
  9. I used to trade like this, blew a couple of accounts. Now I think trading tops/bottoms is for suckers.
     
    #19     Jul 13, 2013
  10. Get out, you can always get back in.
    I would just get back in and forget about the trade, there are hundreds more to come. If this isn't the way, you are trading too much size imho.
     
    #20     Jul 13, 2013