Gap Openings - Maybe a little discussion, dialogue on Gap openings. Personally, I rarely buy into openings like today's, AT THE BELL. Sure it looks good,SPFutures are rocketing, stocks will pop at the open, but can you get in and make money? Dell opening up 2 3/8, is there room for a TRADER to make money?
Personally speaking, my recommendation would be to wait a little bit (unless I'm shorting the opening gaps which I wouldnt do on major reversals but on relief rallies), perhaps, fifteen - thirty minutes, until they get all the Dow stocks open, until all the market buy orders entered preopen are filled and profit takers have a chance to get out. Usually the market will edge back and pause, at which time, the day faces a critical decision, sell down harder or rally again.
Yes, you sometimes miss moves. Maybe the opening offer on Dell is the one to take, but traders have to get used to missing moves. You cant get the bottom, you arent going to sell at the top, you have to apply disciplines that have worked for you.
For me, if I want to go long, well, I didnt take them home last nite, no value in being upset about that... now, how to handle getting in, ifyou think the rally sticks. For the most part, sit back and wait for profit taking and guage the potential for the market to reextend.
Then when you see the upticks, the bids coming on, and it feels right, that would be a more acceptable time to enter.
Again, if it doesnt pull back, so be it. You missed it, thats trading.
Regards,
Steve@yamner.com |
