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Of course this is NOT the only way that a market move can develop. Movement
can happen in any of about 50000 ways. However, it happens frequently enough
that I consider it a major impact on overall market movement. The whole idea
is to catch many or even most traders unaware, cause short covering and
"profit taking" in a big way. As only two or 3 indicated any interest in
this subject I will not belabor the point. I was hoping for more ideas to be
forthcoming. Most of the suggestions centered around consistency, money
management, and no second guessing. One suggestion was to trade divergences.
I thank those that replied. None of the original post reflects how I trade
at present, I simply wanted to generate some thought about some difficulties
that I have faced in the past and why many even advanced traders get into
such traps. No one suggested using options, or strategies like straddles, or
bracketing etc. etc.
Many traders have what they are doing at present or their own ideas so
strongly in their mind that they listen very little, have a lot to say about
that which they know little, and ask good questions even less. I'm often
guilty myself and there is spring in the air.
Money Management has been sighted as the cure for all ills so often I'm
tired of hearing it. Yes, be a perfect money manager it's a great idea. I'm
not directing this critique at anyone in specific just pointing it out in
general.
I think that very large orders (more then a few 100 contracts) seldom ever
reach the floor to be fed off of as was suggested. I sure wouldn't want to
do business that way if I were a large trader. Getting hundreds or even
thousands of fills at different prices. No thank you.
Brent
>brent:
>one way to interpret your post is that these are your views of the "only
way"
>a move (or a range swing) develops...... there are many other
possibilities.
>Take your first scenario..... while one large trader can do an entire lot
with
>another large trader, your post seems to suggest that this only happens
with a
>substantial price change. IF both traders are satisfied with the current
>bid/ask, it may transpire with minimal price change, though the volume is
of
>interest. Secondly, what if there is no opposite large trader.... and
someone
>bids for 5,000 contracts, then the smaller traders and locals may feed off
of
>that and drive the price higher in a nice trending move.
>
>But your second scenario is more interesting.... honestly I think the
answer
>lies in your indicators and your money management. Your post seems to
reflect
>alot of discretion in your trading.... I use some discretion, but never to
the
>point that I'm "fearful I missed a move".... if my indicators lined up
>properly for an entry, and there is a move out of congestion, I'm going to
>take it... usually with a very comfortable close stop, and if the stop is
>hit, fine.... if the move just makes it to the next support/resistance area
>and fades, fine I've got a few ticks, if it continues through, fine I've
got a
>nice move. THE KEY is in your indicators getting you in, and your stop(s)
>managing the trade.... not in your discretionary worry about whether it's
too
>late. In the latter case, if I find that I did not enter a trade early
with
>my indicators, I usually do not enter late just to get on board.... I wait
for
>the next setup.
>
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