A Stock Trading News Trap?

This is a discussion on A Stock Trading News Trap? within the General Trading Chat forums, part of the Reception category; Originally Posted by Penny Picks You know the saying. What's STUPID to one is WISDOM to another. I've been in ...

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Old Feb 3, 2018, 3:23am   #9
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Originally Posted by Penny Picks View Post
You know the saying. What's STUPID to one is WISDOM to another.

I've been in this game a very long time; 1987 actually. I've seen a lot of
"Systems" come and go. There is a few things in my "SYSTEM" that aren't shown. So I'm out a couple hundred bucks; not the end of anything.

But; and that's a big BUTT, not everything is foolproof.
I am having a hard time reconciling between your post here and your original post. You need to make up your mind whether it is a nothing burger or a big deal.
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Old Feb 3, 2018, 12:36pm   #10
 
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I am having a hard time reconciling between your post here and your original post. You need to make up your mind whether it is a nothing burger or a big deal.
I'm not sure but I think you are referring to the 'News Trap' post. If so then nobody would have seen the sharp drop coming.

The indicators I use are based on Divergence from price. I use 3 such indicators and none showed the pending doom lurking around the corner.

What about S/L? Price would have shot right thru a S/L.

As for my trading rules. I have a strict set of trading rules that I don't always follow. : NPHC. It's a heavily traded Micro-Cap that doesn't have
a lot of assets. I figured the Volume made the difference. So far it's doing OK. A lot of traders have their Holy Grail for trading. They swear by them. Me? I go with what I see as a good trade.

It works for me.

A number of years ago I bought 3 LIVE HOG contracts. Out of the blue the price dropped to "LOCK LIMIT" down for 3 days; that was $2000 p/contract.
All the clever ways traders come up with for trading
would not have helped any traders; unless of course you had "Shorted" the contracts. (I don't trade commodities any more.)
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Old Feb 3, 2018, 8:36pm   #11
 
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..The indicators I use are based on Divergence from price.. I use 3 such indicators and none showed the pending doom lurking around the corner.
divergence wouldn't warn you of the clinical trials press release bombshell!

https://www.smarteranalyst.com/2018/...sing-80-today/

Last edited by Kaeso; Feb 3, 2018 at 10:18pm.
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Old Feb 4, 2018, 2:48am   #12
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nobody would have seen the sharp drop coming.

The indicators I use are based on Divergence from price. I use 3 such indicators and none showed the pending doom lurking around the corner.

What about S/L? Price would have shot right thru a S/L.
In considering overall risk there are generally two components to it. There is risk and uncertainty. Risk is the quantifiable portion of the equation. For example, if you are risking 2 % on any one trade and your protective stop level is set accordingly then you have quantified your known risk. Uncertainty is a risk factor that cannot be quantified upfront. You cannot define it and neither can you anticipate it other than the fact that it exist because we know of it from history. It can be far reaching like confluence of events leading to GFC or a change in policy like SNB leading to significant market dislocation and liquidity. On a smaller scale it can be significant news specific to an instrument like in your example. In such events your SL may not be sufficiently protective to limit your overall risk.

In regards to your faith in your indicators in that it is an all encompassing utility trading tool, I am unsure whether you are being incredibly na´ve or too blind sided as to the limitation of indicators. Having three different clocks to tell the time doesn't mean you get better time information.

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As for my trading rules. I have a strict set of trading rules that I don't always follow.
Is it meant to be an oxymoron statement?



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Originally Posted by Penny Picks View Post
: NPHC. It's a heavily traded Micro-Cap that doesn't have
a lot of assets. I figured the Volume made the difference. So far it's doing OK. A lot of traders have their Holy Grail for trading. They swear by them. Me? I go with what I see as a good trade.

It works for me.
Exactly my original point. If it works for you why are you whining? If it works just carry on.

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A number of years ago I bought 3 LIVE HOG contracts. Out of the blue the price dropped to "LOCK LIMIT" down for 3 days; that was $2000 p/contract.
All the clever ways traders come up with for trading
would not have helped any traders; unless of course you had "Shorted" the contracts. (I don't trade commodities any more.)
Not sure what is your point. In trading, the outcome is either you win or loose on a trade.
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Old Feb 4, 2018, 9:59am   #13
 
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In considering overall risk there are generally two components to it. There is risk and uncertainty. Risk is the quantifiable portion of the equation. For example, if you are risking 2 % on any one trade and your protective stop level is set accordingly then you have quantified your known risk. Uncertainty is a risk factor that cannot be quantified upfront. You cannot define it and neither can you anticipate it other than the fact that it exist because we know of it from history. It can be far reaching like confluence of events leading to GFC or a change in policy like SNB leading to significant market dislocation and liquidity. On a smaller scale it can be significant news specific to an instrument like in your example. In such events your SL may not be sufficiently protective to limit your overall risk.


In regards to your faith in your indicators in that it is an all encompassing utility trading tool, I am unsure whether you are being incredibly na´ve or too blind sided as to the limitation of indicators. Having three different clocks to tell the time doesn't mean you get better time information.


Is it meant to be an oxymoron statement?




Exactly my original point. If it works for you why are you whining? If it works just carry on.



Not sure what is your point. In trading, the outcome is either you win or loose on a trade.
There are some interesting points here.
My indicators are used to qualify a trading pattern I may be looking at.
ie: 1-2-3 UP..( The UP indicates the possible end of a down trend)

This pattern appears a lot of different places on a price chart. If I have 3 different indicators diverging from price then I read it as the end of a trend. I then will place a GTC at or above the #2 point of the pattern.

Then, if the GTC is triggered, that probably means that the trend was over and prices are PROBABLY going UP. If, on the other hand prices drop below the #3 point then the trend is likely not over.

Is this an ABSOLUTELY can't miss trading pattern? Aren't they all.


OK. An oxymoron trading Rule. That sounds like Military Intelligence.
One thing I've learned over the years in the trading arena is that Nothing Is Absolute


"LOCK LIMIT DOWN"
You really do not know what you're in for If you've never been in one. The lesson? Do Not Trade Thin Markets!

NEWS TRAPS. Just a name I made up. There was no indicators indicating a pending doom. Also, a S/L wouldn't have saved your butt either.

The only saving grace for OHRP is that you can hang on to it until it disappears from the world. I still have a couple of stocks like that. I gave them to my daughter. You do not get that in the other markets; Commodities, FX, Indexes, etc. I've traded all of them.

OK, One more point.
"In regards to your faith in your indicators in that it is an all encompassing utility trading tool, I am unsure whether you are being incredibly na´ve or too blind sided as to the limitation of indicators. Having three different clocks to tell the time doesn't mean you get better time information."

Indicators are TOOLS; just like "Price Patterns". That's it, nothing more.
They are not a Be All To End All. I have 3 indicators I use for my pattern trading. Why 3? Because if works for me. And that, my fellow traders, is really all that matters.

OK, that's my whining for the day.
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