stops and afterhours action

[vladiator]

I have asked this question elsewhere, but most likely the question just got burried in that thread. I'm sorry to be reiterating the same question guys, but it's smth that I'd really like to get some insights on and I believe others might find helpful. So here it goes:

I assume some of you guys have overnight positions open. How do you go about your stops and the afterhours trading? Or do you largely ignore what happens there? The reason I'm asking is that quite often some of the fluctuations in afterhours are totally bizarre and very shortlived. I've often gotten into a position right before the close only to see it in the red by 2 or 3% in 30 minutes, and then up again in the next hour or so (or before/after the open). Sticking to my strategy, I tend to close most of them the next day and in most cases they are back up
So my question is, do you just shrug off those afterhours shocks that go against you as some weird flukes or do you treat them the same way as regular hours' moves with the same stops etc.
Thanks in advance.
V.

 

[OVERtheLINE]

extended hours is not the time to put a stop in. You still have
to watch it like a hawk....The real volatility in after hours can crush most people anytime. INVN last year lost 14 points in 1 night...That kind of stuff. You have to work your own stops
and when you are wrong with "somthing going on with your stock" then get the frick out and move on....Dont get startled
because all the sudden somthing just moved 2 points against you
because it can move another 2 just as fast.

 

[daniel_m]

great answer overtheline...NOT

that has nothing at all to do with what Vlad is asking. (and if it does, you have a really convoluted way of putting it)

vlad, i don't know. i rarely hold overnight...and in the times that i have ( and can remember), i either didn't pay any attention to the afterhours action, or it wasn't significant enough to shake me out (it didn't reach the point where i would've stopped out)

 

[calibertrader]

If you're gonna trade overnight, and your intention isn't to trade the stock in the after hours, then ignore movement, and don't put any stops or they can trigger you falsely. But don't ingore bad news, cause sometimes after hours will allow you to get at a much better price then you could after the stock opens for trading. Basically you'd have to use a mental stop overnight, and decide whether or not the stock is near your stop point because of bad news, or good news of you're short, or is it just the low volume that's creating the movement. If that's the case, leave it alone.

 

[vladiator]

Originally posted by daniel_m

vlad, i don't know. i rarely hold overnight...and in the times that i have ( and can remember), i either didn't pay any attention to the afterhours action, or it wasn't significant enough to shake me out (it didn't reach the point where i would've stopped out)

Thanks, Daniel_m.
I pretty much have to hold everything overnight due to the mechanics of the strategy and so far I've been treating it the way you have described. I usually just ignore the afterhours action. Most of the moves turn out to be very short lived effects of some large trades. Most of what happens after the market closes appears to be almost unrelated to how the stock will open next day (unless it's info driven). I only get out if I'm still in the red in pre-open trading and if it's beyond the threshold. I was just wondering how other people treated this situation. Looks like those who have overnight positions are certainly a minorty here
Thanks again.

 

[vladiator]

Thanks Calibertrading,
That's pretty much the answer I was looking for.

Originally posted by calibertrader
But don't ingore bad news, cause sometimes after hours will allow you to get at a much better price then you could after the stock opens for trading.

Good point. I'm actually working on a paper (whenever I have time left from trading )where I'm planning to show just that.

 

[OVERtheLINE]

Originally posted by daniel_m
great answer overtheline...NOT

that has nothing at all to do with what Vlad is asking. (and if it does, you have a really convoluted way of putting it)

vlad, i don't know

Thats a pretty good attempt yourself Daniel m. limpdick

 

[daniel_m]

Originally posted by OVERtheLINE

Thats a pretty good attempt yourself Daniel m. limpdick

haha! bit of a touchy fucker aren't ya! that's not as good as your "human garbage" line though!

(check this out, you might wanna get a clue some time soon - you really need to! )