|
PureBytes Links
Trading Reference Links
|
My belief is that what is dangerous attracts prices. Hence if there is a
limit it will inevitably have a strong attraction. Reason is that weak
hand's fears get so strong that they literally scramble to get out before.
However I tested once the fact of buying stop the high of the first SP500 5
min bar after a limit down trade resumption, with a stop at the low of that
bar and generally this produced nice bottom fishing with high % winning and
small losses. Don't know if any of you looked at that more extensively...
Gwenn
Earl Adamy wrote:
> You can bet that had those limits been in, the selling would have
> accelerated and liquidity would have dried up as each limit was
> approached. I was out of the market a few days earlier but I seem to
> remember that there was a 20% limit which is right where that gap is. I
> do remember one decline earlier in the 90's when the pit traders and the
> floor traders were literally chanting for price to drop the limit to get
> the market closed.
>
> Earl
>
> ----- Original Message -----
> From: "Dennis Holverstott" <dennis@xxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, January 27, 2000 5:52 PM
> Subject: [RT] Re: Overnight disaster insurance?
>
> > Here's a 5-minute chart of the SP futures during the 1987 crash. The
> > magenta lines are the current CME limit percantages although they
> > weren't in place in 1987. On Black Monday, there were a couple of
> > chances to bail with only about a 5% loss from Friday's close and you
> > could have gotten out most of the morning with less than a 10% loss.
> > But, if you waited too long, you needed to be capitalized well enough
> to
> > wait for the the retraces that happened over the next 2 days. If you
> > were trading more than about 3:1 leverage and didn't bail early, you
> > were dead before the first day was over. Even 3:1 would have taken you
> > out if you hadn't bailed by Tuesday morning. 2:1 would have given you
> > the option to hang in there.
|