Dow, S&P close up more than 1%, post biggest reversal in 4 years

[Max E.]

The main problem is being very patient, balancing your own contra-bias with the street bias, and being open minded enough to allow the charts to prove you wrong when it turns out you are.

This is something that newbies should be ingraining in their head, i know even as a veteran trader, i still have problems holding through the waves, and making sure the chart proves me right/wrong. I got my start with a firm where we were hyper focused on moving massived positions 35-100k, only for a few ticks, so i got really good at predicting minute to minute price action, and taking my credits for sitting on the bid/offer plus a few cents, but that game died with high frequency trading stealing the spreads, still to this day i find myself eyeing in on stocks so closely that i sell the temporary top only to see it explode higher the rest of the day. generally my predictions are pretty accurate but i struggle with holding past a couple of waves, and inevitable afternoon consolidation, Tooo focused on the minute to minute action as opposed to looking at the bigger picture and trying to see how the daily candle is going to work out.


btw, for anyone who is actually trying to learn to trade base on this thread, today was a fantastic day in basic technical analysis. First off it was a friday in a weak market so you should have been weary it could likely turn into a short squeeze, second we triple bottomed, third you had overambitious shorts on the jobs number..... so many factors that just made this a textbook long today, and it was one of those days where the price action did exactly what i thought it was going to do.(unfortunately im a pussy and didnt hold for the whole day)

1906 was the line in the sand, if it failed after the first substantial pullback market was done, but instead it tested the high, and started grinding higher, and we blew through it, at that point it should have been party hats and cervezas, anyone still short over 1906 was a moron.

The only thing as predictable as this rally today was the fact that i was going to sell it too soon.

Hard to be angry when you pull 30 easy ES points in a day, but im always pissed at myself about what i left on the table..... I was out 20 points early, for no real reason, other than the fact i was anxious to take a profit after a tough month, stupid exit, but easy setup.

 

[dartmus]

Did you expect this big of a reversal?
Yes
Were you up/down for the day?
UP
Did you allow your mind to be opened enough for this reversal? Did you get in long at bottom and hold it all day?
In near the low. scaled out at +10, +20, +30
Or were you selling when market kept going higher?
No. I knew we were gonna keep going up

Are you normally flat before news in anticipation of volatility or just lucky this time?

 

[OTM-Options]

FYI

Hindsight Bias or Hindsight Analyst .............. Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it. A basic example of the hindsight bias is when, after viewing the outcome of a potentially unforeseeable event, a person believes he or she "knew it all along".

Market action similar to Friday's (October 02, 2015) market action will bring out the ET Hindsight Analysts after the market closes. Take their posts with a grain of salt.

 

[i960]

Yeah so I guess those of us who had been postioned for it, traded it, or had previously indicated it as a strong possibility before it even happened are all hindsight analysts because we reflect on the move? Dumb.

 

[OTM-Options]

Yeah so I guess those of us who had been postioned for it, traded it, or had previously indicated it as a strong possibility before it even happened are all hindsight analysts because we reflect on the move? Dumb.

Link to the posts?


J_Smith was on the right track with the very bullish AAPL October 02 113.00 Calls. Unfortunately the timing was off, two days early.

 

[sculptor66]

FYI

Hindsight Bias or Hindsight Analyst .............. Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it. A basic example of the hindsight bias is when, after viewing the outcome of a potentially unforeseeable event, a person believes he or she "knew it all along".

Market action similar to Friday's (October 02, 2015) market action will bring out the ET Hindsight Analysts after the market closes. Take their posts with a grain of salt.

Right. Had the market dropped further, it would be quite easy to present a bunch of reasons why this was supposed to happen.

But I agree with i960 that getting short at around 10:30 am would not have been a smart move. At this time it was pretty clear that the market wanted to move higher for the time being.

 

[Eddiemorra]

Had the market dropped further, it would be quite easy to present a bunch of reasons why this was supposed to happen.

True. That's kind of the problem! I was watching the stocktwits feed and almost everyone was shorting either at the lows or on small pullbacks, expecting a trend down day, or at least a continuation of the drop.
They were also shorting the bigger pullbacks all the way up to 1911 or so when they threw the towel in

Personally I done really well on Friday and called all my trades live. I only bought it because it looked like a cup and handle formation to me, but if I hadn't have spotted that, i'd have definitely been joining the stocktwits guys, and shorting the bounces

It's painfully easy in hindsight, but in realtime, unsurprisingly, pretty much nobody can get it right consistently

 

[dartmus]

the news (a typical shit-show circus) was out and done.

I don't have experience determining the news wouldn't be followed by more news. The rapid pace of the selloff was frightening. It dropped $1000 in the 1st minute.

930am CST was a classic Brooks downtrend continuation signal. That's not meant to slight Brooks and I don't think of it as a poor reflection on him. It's occurring within a context that I'm certain many traders find confusing but my hindsight study agrees with you the TA says it's a dumb place to be shorting (this time). Only thing I struggle with is the possibility of more news.

So my question (for everyone) is ...given the news hit at exactly 730am CST is it logical for me to believe I can become accustomed to trusting there wouldn't be more news, ...if I begin checking the calendar of scheduled releases in advance each day? Because in this instance I can make a case for both being long and being short, and short is the more intuitive choice even tho long is the stronger TA choice. Normally this wouldn't be a problem but I struggled hard with the details before I found a case for going long.

 

[Max E.]

Sounds like you were short on friday, and now you are trying to justify it in your head, i feel bad for you, must have been a rough day. If you are too stupid to get long when the market starts grinding higher off a panick low which had held the last couple days, then there really is no helping you as a trader. Ill be the first to admit im not much of an ES trader, but some trades are just layups.

You dont even have to be right 25% of the time to make trades like fridays pay off from a risk to reward standpoint, so if you arent taking those trades you wont make it as a trader, even if you are terrible at predicting price action you will be profitable if you only take trades with that kind of risk reward.

FYI

Hindsight Bias or Hindsight Analyst .............. Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it. A basic example of the hindsight bias is when, after viewing the outcome of a potentially unforeseeable event, a person believes he or she "knew it all along".

Market action similar to Friday's (October 02, 2015) market action will bring out the ET Hindsight Analysts after the market closes. Take their posts with a grain of salt.

 

[sculptor66]

Sounds like you were short on friday, and now you are trying to justify it in your head, i feel bad for you, must have been a rough day. If you are too stupid to get long when the market starts grinding higher off a panick low which had held the last couple days, then there really is no helping you as a trader. Ill be the first to admit im not much of an ES trader, but some trades are just layups.

You dont even have to be right 25% of the time to make trades like fridays pay off from a risk to reward standpoint, so if you arent taking those trades you wont make it as a trader, even if you are terrible at predicting price action you will be profitable if you only take trades with that kind of risk reward.

Don't forget that there a people who have systematic approach or a framework within they operate. So, it's possible that there simply was no signal or whatever which allowed them to go long. Maybe they even look at the markets in a completely different way than you do.

Yes, this may seem stupid if you look at this ONE case and this ONE trade result, but it still may work out for them over the long run.

So, no need for name calling. For every trading decision that is made or not made there can be numerous reasons. We simply can not know if a trading decision made or not made was stupid without exactly knowing why it was made and what the reasoning behind it was.