I learned a VERY important lesson

Quote from traderdon56:

That's what I want to know, too.

And what broker are you using?

Don-
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Because I didn't place that stop until after 10/18. I sat through the pullback and originally placed stops at 44.90. Only until the rise on 10/19 did I put in my 45.56 stop. On 10/18, I was .01 away from being stopped out...looking back now, I wish I had taken it.

I dont understand the logic here though because on 10/19, the stock opened higher, closed higher, and made new highs...yet today it gaps down.

I hope this answers your question.

..and Scottrade is my broker. I know, I know...people say go to IB..I cant.. I'm too young, lol. Besides, with ST Elite, you get trade-ideas.com for free, and I want to see what thats like :).

cm69
 
cash -- what logic for god's sake it was EARNINGS. read my posts. SNDK had earnings. SNDK owns FLSH = FLSH getting creamed.


Quote from cashmoney69:

Because I didn't place that stop until after 10/18. I sat through the pullback and originally placed stops at 44.90. Only until the rise on 10/19 did I put in my 45.56 stop. On 10/18, I was .01 away from being stopped out...looking back now, I wish I had taken it.

I dont understand the logic here though because on 10/19, the stock opened higher, closed higher, and made new highs...yet today it gaps down.

I hope this answers your question.

cm69
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Congratulations cash. You learned a great lesson. And a not too expensive one either. Don't worry about it. You'll get it back.
There is a misunderstanding here and that is that stops can protect you from gap downs. They may offer some protection but they are by no means foolproof, because a stock can open well below your stop, and don't forget that orders are handled FIFO. And stocks can fall like a rock during panic selling. You already have the afterhours versus trading hours thing figured out.

I would suggest trading, and even investing in, only very liquid stocks. At least say a float of 5 million or so, with an average of >1million traded daily. I know nothing of your stock and haven't bothered to look at it, but the school of hard knocks has taught me to stay away from trading low float stocks, particulary illiquid NASDAQ stocks. (i sometimes invest in them, but never try to trade them). These are the stocks that can gap down on you without warning and for no obvious reason.

And yes, always consider the volume when deciding whether to go with or fade a gap.

Come over to my broker, TOS, you'll be very welcome. They are perhaps the best broker in the galaxy. Their software rocks, and you'll have shadow trader free to learn from.
 
Quote from TorontoTrader2:

Interesting, it has the same chart as SNDK today.
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Sure, if I remember correctly, SNDK bought FLSH, so this is normal reaction after bad earnings from SNDK.

It seems, that it is necessary to look also at shares in same industry.
 
I had a similar experience before cash ...

I put some puts using a market order and it gaped down at the open and closed the gap during the day (and I lost all before I could check my position).

Lost a large chunk of change ... those gaps can be killer ...
 
Quote from piezoe:



I would suggest trading, and even investing in, only very liquid stocks. At least say a float of 5 million or so, with an average of >1million traded daily. I know nothing of your stock and haven't bothered to look at it, but the school of hard knocks has taught me to stay away from trading low float stocks, particulary illiquid NASDAQ stocks. (i sometimes invest in them, but never try to trade them). These are the stocks that can gap down on you without warning and for no obvious reason.

And yes, always consider the volume when deciding whether to go with or fade a gap.

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I dont mean to argue here, but like Slowdown said to my previous post of "It doesn't seem logical" he said "Its an earnings report"... To me, this means that, no matter how large the stock, when earnings come out, and the stock gaps, people dont think in terms of TA or fundamentals, but rather they trade on their emotions, which i guess is why even though a stock looks bullish, it can gap-down, or reverse for no reason what so ever.

basically, when earnings come out, fear and greed take over and common sense is ignored.

your thoughts...

cm69
 
You take a big chance anytime a stock has had a good runup in price holding through earnings. If the stock had already tanked it is much more paletable to hold through earnings.

edit: unless you know the company consistently sandbags on earnings like apple.
 
Quote from cashmoney69:

basically, when earnings come out, fear and greed take over and common sense is ignored.

your thoughts...

cm69
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Price action is in anticipation of earnings reports.

Once the news is reported, it's old news.

Happens over and over and over and over and over and over and over again.

JJ
 
Quote from cashmoney69:

I dont mean to argue here, but like Slowdown said to my previous post of "It doesn't seem logical" he said "Its an earnings report"... To me, this means that, no matter how large the stock, when earnings come out, and the stock gaps, people dont think in terms of TA or fundamentals, but rather they trade on their emotions, which i guess is why even though a stock looks bullish, it can gap-down, or reverse for no reason what so ever.

basically, when earnings come out, fear and greed take over and common sense is ignored.

your thoughts...

cm69
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The thing about earnings too is that good news may already be priced into the runup as is being said but even if it's not the bump up usually isn't that great, depending on the stock. But if earnings are missed there's usually much more of a downside risk. 30% loss or more is actually not that unusual. Going long during earinngs is very risky. Remember RM made $500k in one day shorting DAKT and selling naked puts right before earnings. It tanked. I lost $10k in a couple of hours during a trading halt on a surprise earnings miss announcement by EMC on July 5, 2001. Tanked about 30%. Nothing I could do. Sorry for your loss but you're taking it very well which is actually more important than the loss. Of course preserving capital is most important, but losing a few hundred when you're starting can be a very good lesson. And asking more experienced traders what they think is also good. You'll get it back but don't force getting it back.
This is a 3 mo for DAKT. Notice 8-15-06
http://finance.yahoo.com/charts#cha...arttype=line;crosshair=on;logscale=on;source=
 
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