Todays trading diary "attack by day-traders"
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     quamox
Member
Username: quamox
Post Number: 98
Registered: 09-2002Rating: N/A
Votes: 0
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| | Thursday, November 13, 2003 - 10:48 pm: | 
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Colin, would you (or somebody else) be able to clarify the statement in todays trading diary about OXR being subject to "attack by day-traders" if it falls under $1.00.
Thanks,
Quamox
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colin_twiggs
Member
Username: colin_twiggs
Post Number: 791
Registered: 09-2002Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 05:33 am: |
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Quamox
I prefer to use the term "day-traders" or "pros" rather than the ubiqitous "insiders".
If you place a stop just below an obvious support level (like 1.00 in OXR's case), it is often knocked out by an intra-day false break before recovering to continue the rally. The day-traders/pros trade these false breaks: they wait for the break to run out of steam, buy the stock cheap and sell into the anticipated rally.
Who triggers these false breaks? I have my suspicions.
Colin
(Message edited by colin_twiggs on November 14, 2003)
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starboard_tack
Member
Username: starboard_tack
Post Number: 69
Registered: 04-2003Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 09:12 am: |
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Colin,
That brings me to a concern that has been growing with me.
I notice that Commsec has now introduced Stop Loss. Will this dramatically increase the use of stop losses, and could that then play directly into the hands of these "day-traders"? The stop loss points must be pretty obvious.
I have seen the exact effect that you are talking about - especially in the last week. There have been some very long red tails.
Are we better to use closing price as the trigger for a manual stop? These too can be pretty predictable.
I'd love to hear more of your (and other's) opinions on all this.
Regards,
Starb'd
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colin_twiggs
Member
Username: colin_twiggs
Post Number: 797
Registered: 09-2002Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 10:01 am: |
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Starb'd
On some stocks false breaks outnumber real breakouts by at least 2 to 1. I believe that we need to adjust our trading style to cope with them.
Colin
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wadda
Member
Username: wadda
Post Number: 139
Registered: 10-2002Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 10:10 am: |
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Colin, Starboard and others,
Having been caught out by some of those 'long tails' Starboard mentioned and not being able to manually stop - ie can't trade during ASX hours because of my work situation, do you have any suggestions how to adjust our trading style?
Percentage stops would not have worked, perhaps need to look at longer term trading and using MAs as stops a la Weinstein?
Regards,
Wadda
'This above all to thine own self be true'
Hamlet, Act II, Scene III
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squiresk
Member
Username: squiresk
Post Number: 35
Registered: 03-2003Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 02:54 pm: |
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Hi, I was looking into these kind tricks, especially the ones the market makers get up in the UK, and I stumbled on this story. Quite amusing, and relevant.
http://www.fool.com/specials/1999/sp991027halloween9.htm
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wadda
Member
Username: wadda
Post Number: 143
Registered: 10-2002Rating: N/A
Votes: 0
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| | Friday, November 14, 2003 - 04:12 pm: |
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Entertaining story thanks squiresk.
Big cross to day trading!! Gulp!
Wadda
'This above all to thine own self be true'
Hamlet, Act II, Scene III
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