Sunday, June 10, 2012

Tricks of the Active Trader

“What would you do if the sky was falling?”

“Sell the sky.”

“Need a friend? Buy a dog?” – Movie Wall Street

When you rearrange the letters in slot machines it becomes “cash lost in me.”

What’s your pain threshold.  The pain threshold is the loss level at which you will close out open positions, cancel resting good-till-cancelled orders, and close your futures account.  No one’s funds are unlimited.

Mini Index Future rough rule of thumb.  If gap size is between the two, an equal chance of breakaway and common.

Method #1: 30-min H/L.  If it’s hold, it’s breakaway gap.   Not hold, it’s common gap (will be filled).

Method #2: Gap size

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Method #3: NYSE tick readings.  Can not exceed tick reading greater than +300 (<-300 for short) within the first few minutes.  Common.  Otherwise, breakaway.

Method #4: overnight H/L

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