On gaps down of 1% or more, I always pay attention to the first 15 minutes from the open. If the market starts to fill the gap, I buy and go long for a day trade. This applies to gaps up of 1% or more where extensive selling may take place in the first hour of the day, in which case you'd want to be short.
At the first breakdown, I sell. Notice the "floor". This floor is key because the next low that the market will make must not hit this level! If a higher low is achieved and a breakout forms, I buy again. This time the uptrend must exceed the previous high where I sold. Usually, I buy so close to the low that any major pullbacks do not become a problem.
The descending triangle was a scary one today, however, my rule is to sell if a higher high cannot be achieved, which in this case was the second peak of the triangle. After selling, I did not buy again, and held all cash for the day trading portion.
Who knows what will happen this weekend?
No comments:
Post a Comment