REMEMBER , REMEMBER THE 17th OF APRIL 2000

Some nights always stand out in a winning trader's mind .

17/4/2000 was one such night for me . I recall it as clear as a bell.

the background to that night was that the markets as you all know , had been a raging bull since the early 90's . but it began to show terminal signs of fatigue at the turn of the new millenium . on the first day of trading in the new year , the Dow began to tank , which was really the start of the next 3 year's bear market .

tech stocks, ( NASDAQ) had been the darlings of '99 and had been the leaders in the " new economy " boom , hadn't been affected yet . they had been holding up quite nicely even after the mini crash over the new year.

But how fast that was to change , on the night in question , the NASDAQ finally caved in .
I don't not recall how much it dropped that day but it was a major move to the downside , my eyes were peeled on the DOW .

as I watched the last 3 hours of action it was down something like 300 points already , and the signs were getting worse .

I thought " hell , I've got to short this , but be careful because there's bound to be a major pullback , so you might as well wait . "

so I waited and watched, another 1.5 hours had past and the thing was down 500 points .
" 500 points I thought and no pullback , am I shorting now ? no , there MUST be a pullback now "

so I still waited , and finally a huge pullback , around 200 points . at market close , the Dow was down a record 400 points .

" Damn I thought I had wasted my chance , then I thought , ah what about Europe tommorow ? how far will that fall , what prices will the SB s be quoting , will they over compensate the Dow's pullback ? "

I decided then that the Dax / Cac might give up intraday maybe 250-300 points , and that the opening drop would be around the 150 point magnitude .

So I confirmed that I would sell any opening quote up to - 120 points .

I called FS immediately : " price on tommorow's CAC please " , the quote was something like - 80 , I was right they can over priced the correction . I jumped on it " sell me 20 pound " I said . I rang again and the quote was now like - 100 , I sold another 20 .

I could hear the trepidation is fat dave's voice as I gave the sell orders , they knew I got them.

sure enough over the next half hour , the quotes accelarted to the downside and soon they were quoting someting like - 140 for the open.

I felt vindicated , great feeling .


the next day , Europe opened , the action was fast and furious ,the Cac opened and dropped as I expected , within moments it was -120 and droping FAST .

another half hour and it was down 200 , I was in the money to the tune of 100 points , the fall accelerated , dropping another 50 , I was in now for 150 .

when was I going to take profits , everything was happening as I expected so far .

" wait I thought , like this it's bound to bottom out at about - 300 points "

the market was down -250 now , I watched more as I waited to take my 180 point target . another - 30 points and I was there .

Suddenly , in less than a second , the market rebounds in a spike .

" no problem I thought , as it corrects down again I'll take my money . "

the market does not go down again, the spike increases in length , my profit now cut to 100 points , it keeps rising , now only 70 pionts , and still it rises .

" damn I thought I have to take profit now o/w there'll be nothing left"

I finally close out the trade for a 50 point profit , it should have been 150 points !

the market finally closed up that day , so it was still a great trade , I made 2000 pound in less than a day and it turned my account from a loser to a winner and set me up for the next 2 years winning run.

Still there are a number of issues which we have touched on , which this experience confirms :

1) never be too greedy , always protect your profits at every stage , never let them melt away.

2 ) expect the unexpected . have plans for such whether cutting loses or taking profits.

3) always think about alternatives . in this case I was able to short the CAC BECAUSE I WAS SB'ING , I COULD NOT DO THAT IN THE REGULAR MARKETS AS THEY HAD NOT OPENED .

SBs ALLOW TRADES OUTSIDE MARKET HOURS AND THAT CAN BE A REAL ADVANTAGE ( an underestimated one , despite all the other bad aspects of SBs )

4 ) The power of an SB credit , always get a credit account . I made 2000 pound over night W/O PUTTING 1 PENNY DOWN . bloody fantastic .

GJ.

1) I always use a TS , but this was in the pre sofware days , and you could only trail your stop via phone , and that night was a crazy night , they couldn't, because of sheer volume keep up with things like TS's .

so it's either you watch the stop , as I did , or you forget the whole thing.

Even watching it , the entire drop and spike back of what, 500 + points happend in less than 40mins or so , it really was that crazy . if you weren't in on that night you wouldn't know.

The market did close POSITIVE for the day , so I actually did very well but could have been better .


>>Just because you didn't put a penny down upfront, doesn't mean you wouldn't have been liable if you'd >>had a losing day. Do you really think the average person will trade more sensibly on credit or with >>genuine cash that they have lodged with the bookie?


a bit irrelevant here . you are always liable for losses , credit or deposit , so you might as well use credit , you got 3 weeks leeway to make your losses up. 3 weeks free credit . it has no adverse effect on your trading ability , in fact I would say the reverse is true.





>>undoubtedly a key night for you in terms of your trading there was a certain element of luck in it (dunno >>what the laws are on grey market trading but it's not inconceivable that one of these days firms are >>gonna stop quoting half way through the night, leaving anyone with a credit account facing the >>possibility of a big hit with no way to close out their trade).


grey market ? the SBs have been quoting ALL majors o/s of market hours ( subject to their office hours ) since they started. In my case the CAC was quoted hours after it closed . I used the Dow to track what it would do the next day , and I nailed them - HARD . no luck involved , good observation and quick pre planned action.

I doubt if they could close down the market if you still had a position in it , w/o letting you have some chance to get out .

still in that scenario , you BEST HAVE CREDIT and not let them have 1 single cent , if they trap your position and then f@#k it up , then let them sue you , and see what happens .

The worst thing would have been to have $ with them and them just rip it off you !

Looks like the big fall was on 14.4.2000. So I presume you held the large short over the weekend?

>>Firstly, like I said, I simply don't think you would trade the same on credit as on debit, but we'll have to >>agree to disagree on this one as it's a pure matter of opinion.


doesn't change anything . I can't see how using credit would have any extra adverse effect on one , in fact I would say the reverse is true.


>>Secondly, what you described the SB firms as doing IS a grey market. I never said it was shady, illegal >>or anything like that. That's not what a grey market is. All I'm saying is that from a legal standpoint this >>probably gives them some loophole to use if things get really bad.


who cares what it's called , you could call it a blue donkey for all I care , as long as I can hit you with it and take my 2 grand !


>>And as for tracking the dow, sure, I understand, but as it's a closed market that you're trading, and >>they're entirely making the price themselves, what's to stop them causing these huge spikes and just >>caning everyone, waiting till loads of people have cut their shorts and then lowering the price again.


No , you got it wrong . the CAC was closed and I was using the Dow to track what it ( cac )would do the next day , and I nailed them. the SBs have always quoted the CAC o/s it's own market hours.



>>what's to stop them causing these huge spikes and just caning everyone, waiting till loads of people >>have cut their shorts and then lowering the price again.



they could in theory BUT the did NOT , that's what counts . on that night , the DOW was literally a one way ticket down ( except for the correction ) , if they did as you say, it would have been very very OBVIOUS .

they also have the law to contend with , yes the r'lators are crap but they are still hanging over the SBs heads so they don't do something as easily blatant as that .

again in that scenario , you BEST HAVE CREDIT and not let them have 1 single cent , if they f@#k up your positons, then let them sue you , and see what happens .


>>Sure SB firms could in theory do that anyway (in fx or whatever) but the absence of an underlying market >>makes it far more likely that this could happen.


see above . it didn't and I won big that night .


>>Do you still trade the indices at all?


yes , I do but am on a break at the moment .

why ?

>>Looks like the big fall was on 14.4.2000. So I presume you held the large short over the weekend?


big fall on DOW was 14/4 , but on the CAC was 17/4 , so you kind of got the wrong chart up.

and yes I was short over the w/e , on this occasion .

I think a lot of people are jeaaalous .


kekekekekekekeke.

Well done on that day and your subsequent 2 years winning streak. Goodd luck for future tradeing as well.

gullible ,

thank you, I think .

what I wanted to do here was illustrate this highly unusual night of action , which saw a record down close on the dow and a massive intraday swing of some 800 points including the upside corretion.

I have waited for another like this since , and as we know it has not happened , the next time around , I reckon we will get 1000 + swing 1 way or another .

this and indeed as was the 17/4/00 , equal to the usual swings in 1 whole month's worth of trading .

incredible , normally if I missed your normal 100 point swing , I couldn't care less , but for days like this , in trading terms , I truly live for them .