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Randall:
I seldom trade against the trend. And when I do, I usually regret it.
That being said, I see the same thing happening time and again when the market
approaches the limit collars--especially in the Nasdaq 100 futures [perhaps
because limit down is a common occurrence in the Nasdaqs]. I usually take a bit
of profit as prices approach the collars and then if there is a bounce, I can
always sell that portion back out once I see price returning to the daily trend.
I guess that's taking advantage of the bounce, but in the direction of the
trend.
Best,
Tim Morge
James Alvis wrote:
> > You might want to consider the risk of buying at limit down in volatile
> > markets, anticipating a bounce. Even if it works nine times out of ten,
> the
> > tenth time can bury you.
> >
> > By the end of the day in the Crash of 1987, many locals who stubbornly
> held
> > to their habit of buying breaks, had to sell not only their Porsches but
> > also their CME seats. Will it happen again? Without doubt. Will most
> > traders see it coming or even recognize the danger as it unfolds? The
> > markets have a nasty habit of regularly surprising the majority, including
> > some traders that are supposedly the most knowledgeable and sophisticated.
> >
> > Consider the risk/reward. Preserve capital. Trade against a strong trend
> > only with great care. The markets will always be open tomorrow for those
> > with the means to participate.
> >
> > Regards,
> > Jim Alvis
> >
> > ----- Original Message -----
> > From: "Randall Kurzon" <rkurzon@xxxxxxxxxxxxxx>
> > To: "Omega-list" <omega-list@xxxxxxxxxx>
> > Sent: Thursday, October 26, 2000 10:38 AM
> > Subject: Limit Down Bounce
> >
> >
> > > I have noticed that almost every time the SP or the ND are halted at
> limit
> > > down it is followed by a bounce. I've been watching that for the last 5
> > > years and as far as I can remember there have been very, very few times
> it
> > > does not bounce. Any comments as to the reliability of entering a
> position
> > > right after the market starts trading again from limit down?
> > >
> > > Randall
> > >
> > >
> >
>
>
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