Who said Wall Street isn't filled with drama queens?

Discussion in 'Trading' started by crgarcia, Dec 11, 2007.

  1. Selling off like another terrorist atack; just because the Fed lowered 0.25%, and not the 0.50% they expected?

    Living proof markets are emotional and irrational.
  2. Not at all irrational. They go exactly where GS wants them to go.
  3. What Goldman has to do with this?
    Please elaborate...
  4. [​IMG]
  5. open


    I thanks god every day for giving me yet another day in the Marine Corp HHUURAAAAA

    no not Marines, Wall st .......yeah Wall st :)
  6. Market just gets ahead of itself, always. They start off thinking it's X, then hype pushes them to believe in X + 1. Then they start thinking "well, if it's X+1, why can't it be X+2?" And so on and so on.

    Then they find out it's just "x", and the weeping and gnashing of teeth comes in.
  7. gobar


    :D :D :D

  8. Disregard that previous post.

    I meant to say -

    Yeah the markets are crazy random and emotional.

    That is all. :D
  9. cd23


    Think of people who use stats and predict.

    Then they place their bets.

    Because they have taken lessons in the CW, they do two other things. They do money management and they use protection.

    How do these three things work together: the bet, the MM and the stops using some kind of limit order?

    Watch their "tells": the limit order protection.

    Who is their "insurance" that their protection is going to work? Well, its the market order that allows their limit to be executed.

    With no market order to make that expected trade work, what happens? The limit order becomes a market order where there are no limit orders facing it.

    WhEEEEEEEEEEEEEEEEEEE the limit converted to a market order takes a ride with no fill for quite a while. Others accumulate along the way.

    Before the E mini's it was really fun. Before the advent of electronic trading it was even more fun.

    I used to call such cascades on FOMC day, Greenspans. A Greenspan was 150 DJXX points. There were usually three cascades on an announcement. Often each cascade was about two greenspans. LOL

    Protection got mowed down three times until the "news" wore off after three cascades.

    I do not bet. I bracketed and got swept in on the "right" side of the trade. I C & R'ed the other side of the bracket right into the end of the cascade as a reversal. Then for the second cascade I just used reversal phone calls. Same for the third. Then I just went back to the routine of what the sentiment was before the "news".

    Today their is modern technology so it is easier to track the cascades in about four ways. It is also to have visuals on their ends and the turns subsequently.

    The cascades were like riding the train in Switzerland; you could set your watch by the action as well.