no4j
45 posts
msg #26971
- Ignore no4j |
6/21/2003 9:07:10 AM
Does anyone here day trade? Do you ever trade based on pre-market news? Like upgrades, beating earnings estimates, etc?
If so, do you consistantly get a pop from positive news?
Dave
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EWZuber
1,373 posts
msg #26979
- Ignore EWZuber |
6/22/2003 12:59:15 AM
Yes I day trade. However I don't usually trade on news. I trade primarily on technicals in companies with the appropriate fundamentals depending on wether or not it is a long or short position. I use monthly, weekly & daily charts to locate the stock then use hourly and 5 minute charts to open and close the position. I like to pick them up just as they bounce up off of a major supporting trendline or moving average on the daily charts while at a stochastic cycle valley. Hourly charts must be at a stochastic valley also. Then I will ride them up until the hourly chart stochastic cycle has topped out against some resistance area and is about to start a new stochastic distribution phase.
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EWZuber
1,373 posts
msg #26980
- Ignore EWZuber |
6/22/2003 1:50:42 AM
One other thing I forgot to address, news will not give consistent results. It's not the news it's how the market reacts to the news that is important. Also much depends on the exact technical condition of the stock at the time of the news release. Say for instance some news came out premarket and the stock gaps up big time at the open. The stock can't seem to get any higher and after a half hour or so into the session it begins to crash precipitously. A close examination of the technicals reveals that the stock was overbought on daily charts and hourly charts at yesterdays close. It gapped up at the open dead up against some formidible resistance. In such an overbought condition the only kind of news that will reliably push the stock through this resistance is news of an improved financial position, in other words something that GUARANTEES this company FUTURE earnings growth along with improved top line revenue growth. Real $$ value. Even then I would want the general market to be in an uptrend to even try it. Often I have seen big money ride stocks up to these resistance levels in the premarket inticing buyers in just to slam it to the unsuspecting retail investor who is unaware of these details. The average guy is left with his head spinning trying to figure out how the stock could drop so fast after such seemingly great news just came out. Also the premarket trades so thinly that you don't get any kind of a consensus from the market until the regular session opens. The consensus from the market might be totally different from what a handful of traders were thinking in premarket trading.
I'm not saying you can't trade news in the premarket, it just holds much greater risk. You will need to get to know what kind of news really moves the market and what gives it a fleeting pop. Also you will need be very knowledgable about how the technical picture influences the movement that is created by the news.
Example, bring up a 2 year daily candlestick or bar chart of SSFT on BigCharts.com. Draw a trendline from the high formed on 6/11/02 across the highs of 11/27/02 & 12/02/02 to the present. News came out on the morning of 6/6/03. Notice how big money gapped the stock almost dead up against this trendline resistance. Unsuspecting buyers jumped on SSFT in the premarket and again right at the open but it didn't get far before big money dumped thousands of shares into the market. The little guy never stood a chance. Big money was just sitting there waiting for them to commit. They knew that this trendline represented brick wall resistance and this huge gap up offered a lot of 'free money' to those holding at a lower price. There was no way that this news ( something about the govt. anti trust div. allowing SSFT to complete an acquisition ) was going to have the impact needed to break this 1 & 1/2 year trendline resistance. It didn't even guarantee that the company would be worth any more when the acquisition was complete. In fact it left questions as to how well the two companies would work together synergistically etc. I apologise for the length of this but I feel there are few good answers to complex market strategies. Best of fortune
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ranbaker
7 posts
msg #27030
- Ignore ranbaker |
6/23/2003 9:35:12 PM
I have been trading for a number of years now. As far as trading the news, I try to avoid news plays all together. One of the common mistakes many new traders make is playing news, and playing penny stocks. My advice is to trade the chart. Trade what you see and not what you expect to happen. Trying to "guess' how the market will respond to news can be a tough job.
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petrolpeter
439 posts
msg #27039
- Ignore petrolpeter |
6/24/2003 3:57:27 AM
Hey ranbaker,can you give me soom detail of your favorite chart setups?Have you seen a lot of good setups lately?Thanks.
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ranbaker
7 posts
msg #27047
- Ignore ranbaker |
6/24/2003 2:10:20 PM
Petro, I look for range breaks, breakouts, and PB to the 20ma for strong trending stocks. Set ups happen every day. Never seems to be a lack of them.
I limit my world to the S&P500, and Naz100, stocks trading with a min volume of 500k, an ATR min of 1.2, and price between $25-$65 though I do trade above the $65, especially with hime builders lately. But very very rarly trade stocks less then $25.00. Short or long makes no difference to me. I trade the chart. I try to trade what I see, not what I think should happen. Also, I know my stop before entering a trade. My risk is the same for every trade I take.
I prefer to swing, but DT and occasionally scalp.
ranbaker@attbi.com
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four
5,087 posts
msg #130851
- Ignore four |
9/4/2016 1:18:46 AM
pop
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