Anyone experienced the Oct 1987 crash?

Quote from Cheese:

You can run yourself ragged on viewpoint trading, by viewpoint trading I mean being either bullish or bearish. ET threads have been, and will always be, full of the never ending story of bull v bear.

But the markets go on. Price goes on - up and down, up and down. The upmoves and downmoves. When the melodrama is there and when it is not. And the money is there all the time. In the gyrations. You can access or ignore all that money, day in and day out.

What you have to do is buy the upmoves and sell the downmoves sequentially. To do so, you must apply an accurate methodology, using liquid markets (eg ES,YM,CL). If I take CL the range for today (Monday Sep 15 2008) was 254. Very nice gyrations were there for you to use, sequentially, one after the other, open to close. Remember, buy the upmoves, sell the downmoves, sequentially.

The sequence today (Sep 15) in the CL session's gyrations (up/down repeating 10.00 to 14.30) produced 13 macro 'legs' of minimum 45 points (ie cents). The mean average of those 13 'legs' was 120 points per 'leg'. Therefore between 10am and 2.30pm, thats some 1500 points which were on offer.

You can make yourself rich.
:)
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Interesting post Cheese.
Strange that no one has commented on it.
What is that methodology that you mentioned?
 
I started trading in 1986. So I was very green when the 1987 crash happened. My whole trading capital then was invested in call spreads on various stocks I remember. And of course I lost it all.
 
Yeah I was there. Brokers did not answer their phones. Nobody seemed to care about the quality of companies, they just wanted to sell. My account equity was greatly reduced during the crash but I bought stocks as a contrary trade. Everybody at work laughed at me and it was very embarrassing. I made a little money when prices recovered. I could have traded better.

If I could do it again I would follow trends, sell stocks as prices began to decrease long before the crash, buy leading stocks during the recovery, trade long term. There was big money to be made but not by following the crowd.

I remember interest rates rising for about 6 months before the crash and the NYSE advance decline line did not confirm the Dow Jones Industrial Index graph at the top. I recall breadth was very narrow for a few days right at the top.
 
I remember the fear and panic. I've never been so scared. My friends were laughing at me. It was the only day of my life I bought a lottery ticket.

Most of my money was in a mutual fund, and I recall coming to the realization that *IF* I could get through to sell, it would be at the NEXT day's closing price, which might be another 20% lower. My diversified portfolio lost 36% in the space of 3 or 4 days.

PS: the VIX got to almost 175. The current 36 or 40 highs are nothing by comparison
 
I watched it all go down on a 15" green mono chrome monitor (state of the art in those days)

There are no similarities whatsoever.

The 1987 crash was a surprise, today's markets conditions are too well known. :cool:
 
Cheese, your post below is strangely Jack-like, But it fails to capture the essence of Jack in one respect, viz,. it is not entirely nonsensical.

Quote from Cheese:

You can run yourself ragged on viewpoint trading, by viewpoint trading I mean being either bullish or bearish. ET threads have been, and will always be, full of the never ending story of bull v bear.

But the markets go on. Price goes on - up and down, up and down. The upmoves and downmoves. When the melodrama is there and when it is not. And the money is there all the time. In the gyrations. You can access or ignore all that money, day in and day out.

What you have to do is buy the upmoves and sell the downmoves sequentially. To do so, you must apply an accurate methodology, using liquid markets (eg ES,YM,CL). If I take CL the range for today (Monday Sep 15 2008) was 254. Very nice gyrations were there for you to use, sequentially, one after the other, open to close. Remember, buy the upmoves, sell the downmoves, sequentially.

The sequence today (Sep 15) in the CL session's gyrations (up/down repeating 10.00 to 14.30) produced 13 macro 'legs' of minimum 45 points (ie cents). The mean average of those 13 'legs' was 120 points per 'leg'. Therefore between 10am and 2.30pm, thats some 1500 points which were on offer.

You can make yourself rich.
:)
More...
 
If you want to get a very accurate and in depth account of what caused the '87 crash and how it played out, read Richard Bookstaber's book "A Demon of our own Design." One of the best books ever written on markets, market makers, hedge funds and trading.
 
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