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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: rocklobster who wrote (7844)	1/11/2002 12:19:58 AM
From: Susan G	Read Replies (2) \| Respond to of 26752

I traded the range twice, short, and the initial move up from the open long after I covered my overnight. Held my breath and had my finger on the trigger when I entered too soon on that top and had to live through the second pop. But all the other indicators I was watching, and the rising wedge they were forming let me know they would reverse. It's SO easy to tell if the pops are nervous shorts too. And if yo cover with them, you usually buy the high. And you know floor traders are selling that pop as the inexperienced traders run for cover, so down they go <g> But as always, NOT ALWAYS <G> So you have to be ready to act fast and on your toes at all times, much more than in stocks. Holding a trade overnight is a gamble. What I was going on was a play that Larry Connors wrote about in the Raschke book, where when an index opens in the top 20% of the range, and closes in the bottom 20%, (or vice versa) there is a 80-90% probability of follow through the next morning in the direction of the close. And that selloff was hard and unexpectedly swift so I was pretty sure there would be some follow through selling the next morning. The trading overseas can affect the open though, so you have to keep your eye on how strong Asia in the evening when you decide to hold. ONLY hold when you have a good cushion - at LEAST 10-20 pts profit because there's still a chance you could lose, and with that cushion you don't lose capital. But I'm not sure I will do it often at all. I prefer a good nights sleep : ) There is a sudden flurry of action each night around 3 am, when the European currency markets open, and I've noticed they move up and down in a ten pt range before and after that, so it's hard to place a stop unless it's REALLY loose. And why take that chance... A few nights ago I held a contract overnight long, it had profits and a 8 point stop. Guess who got taken out at the lows at three am, I think I was the next to lowest trade!And there went some profits, when it would have have more profitable if I had held it without a stop, as the futures were up premarket, and I got taken out about 20 pts lower. Part of the reason I'm switching to futures is so I can have more free time, less looking at all the different stocks. I can concentrate on the indexes and the large cap nasdaq stocks that affect the index the most. So if I'm checking a contract late at night, or not sleeping well or up at 5 am, that ruins the entire idea! So I'll only be doing it when we close at an extreme, or if I'm up late anyway. The trading is slow at night, but it's more active than you think and they move slowly up and down, no whippiness at all. Maybe try that instead of holding overnight, and dealing with the morning ramp or selloff, hold it until midnight and see how comfortable you are with it. 8-24 pts a day is fine! Slow and steady is the ONLY way. And don't trade too many contracts at once is one of the things I was told, even if you have the funds. Most of the best traders watch and wait - for the big moves like yesterday, and avoid the chop all the time. They trade much less often than you would think. I'm still learning, I need to experiment with style. Yesterday I held all day, today I scalped and only 3 round trips. And protect your capital at all costs. An account can be blown up in minutes if the futures take off and you don't take your loss and run. And sometimes they never come back to the level you bought! The Deer in the headlights demon is the deadliest.