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Earl did a pretty good job of defining times when the market doesn't make
sense. Using the Dow as an example; if you look at the vast majority of the
ranges and they are less then 116(the cumulative average over the last few
years) points and you start getting multiple days with ranges twice that
much be careful. After a while it is a matter of feel. Ray is right, that
there are ways to trade virtually all market conditions but you have to be
prepared for the degree of risk that you are taking. Finally, yes if you
are on the right side(or straddled) of a breakout like the recent ones in
SF DM BP its a good thing but getting excited by the big action and jumping
in just because it's happening is(for lack of a better description) a
suckers move.
Brent
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> From: Philip Schmitz <pschmi02@xxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: trades anyone?
> Date: Friday, September 11, 1998 7:18 AM
>
> Nice point you're making here, Brent, and
> important for a less experienced trader like
> myself. What can be heaven in options, can be
> hairy in futures.
>
> > Kevin, I agree with the first part. I have a
> > comment about your trade. It
> > has been my experience that when extreme
> > volatility happens, many of the probabilities go
> > out the window. I usually decline to trade in
> > these
> > conditions now.
>
> This is productive. Tell us more. In concrete
> terms, when do you stand aside based on
> volatility? Can you post an example? Other than
> chart tracings that look like 8.5 on the Richter
> scale, what criteria do you apply to determine
> when a market 'doesn't make sense'?
>
> Philip
>
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