to those that bought the spike today

Gordon Gekko · Jul 3, 2003

Quote from Quah:

Of course! Right before it happened - in anticipation of the move, I would have switched to 15second charts or smaller - obviously! I see what you are saying now.

Quah, i have a lot of respect for you. don't take this the wrong way. it's fine if we disagree.

besides things like illiquid said, what i'm saying is like this...

say you normally watch 5 min bars. say price enters an area you think is good for going long on the 5 min chart. now suddenly it tanks way to the downside. now you should consider being really bullish. but you don't want to just buy when you feel like it. knowing a move like this is probably not going to last long, for an entry you need to zoom way in. as i've said before, for something like this, you probably need bar intervals less than 1 minute. for the exit, i would look back on the 5 min chart for price to return to an area i consider normal.

Gordon Gekko · Jul 3, 2003

Quote from klutz:

Its no mistake that you fucked up as a trader.

yes, i've made mistakes like any other trader has.

what's fucked up is your opinion of me. you don't know much about me and you're making all kinds of assumptions.

BTW, THE FACT THAT YOU ARE SO EAGER TO ATTACK MY WEAKNESSES INDICATES TO ME THAT YOU MAY VERY WELL HAVE SOME PROBLEMS WITH YOURSELF. PEOPLE LIKE TO CRITICIZE OTHER PEOPLE WHERE THEY, THEMSELVES, ARE WEAK. YOU SHOULD BACK THE FUCK OFF. IF YOU WERE ANY TYPE OF SUCCESS AT ALL, YOU WOULD KNOW IT TAKES LEARNING FROM MISTAKES, AND YES, I'VE MADE MANY. YOU BETTER BE DAMN CLOSE TO FUCKING PERFECT TO CRITICIZE ME LIKE THAT.

mrpace · Jul 3, 2003

I don't know....I was using 3min ESmini charts at the time, and I took a nice chunk out of the rebound bar.....never zoomed in....just watched volume....but then again, that's all I ever watch these days.

Quah · Jul 3, 2003

Quote from Gordon Gekko:

.....knowing a move like this is probably not going to last long, for an entry you need to zoom way in.....

Well, i can agree with everything you said - except my problem is I had no way to know that a move like that is not going to last long.

Somehow, you say you did.

I guess it's just a matter of risk - I'd rather sit out insane moves like this than play them.

klutz · Jul 3, 2003

Quote from Gordon Gekko:

yes, i've made mistakes like any other trader has.

what's fucked up is your opinion of me. you don't know much about me and you're making all kinds of assumptions.

BTW, THE FACT THAT YOU ARE SO EAGER TO ATTACK MY WEAKNESSES INDICATES TO ME THAT YOU MAY VERY WELL HAVE SOME DOUBTS. PEOPLE LIKE TO CRITICIZE OTHER PEOPLE WHERE THEY, THEMSELVES ARE WEAK. YOU SHOULD BACK THE FUCK OFF. IF YOU WERE ANY TYPE OF SUCCESS AT ALL, YOU WOULD KNOW IT TAKES LEARNING FROM MISTAKES, AND YES, I'VE MADE MANY. YOU BETTER BE DAMN CLOSE TO FUCKING PERFECT TO CRITICIZE ME LIKE THAT.

My opinion of you is based on what you have posted. I am making no assumptions. What happened today is a serious issue for genuine traders. Your comments on the issue are ridiculous.

Kicking · Jul 3, 2003

only a gambler would have traded that move. What's the point of trying to make 5 NQ points with the risk of losing 10 or 20 points or be caught limit down ? By the time you got a fill teh market maybe already 10 points lower.
there was no sign of a 1 min. bottom it spiked down closed at the lows then bounced almost right back. You can look at all the time frames (NQ)there was no sign of a reversal until the bounce was almost completed, (ES and YM charts are a bit different but who would buy YM just when it dropped 300 points, even if you are right your trade might get busted and God knows what happens next...)

Gordon Gekko · Jul 3, 2003

Quote from klutz:

Your comments on the issue are ridiculous.

YOU KNOW WHAT, I'M GLAD YOU THINK WHAT I SAY IS RIDICULOUS! THINK OF THE BELL CURVE. THE MAJORITY IS GOING TO BE HERE BASHING ME--"IT CAN'T BE DONE! YOU'RE RIDICULOUS!" THE SMALL MINORITY AT THE END OF THE CURVE ARE GOING TO KNOW WHAT I'M SAYING. IT WILL APPEAR THAT I'M NUTS, DUE TO THE RATIO OF BASHERS (MAJORITY) TO SUPPORTERS (MINORITY), HOWEVER, I AM RIGHT WHERE I WANT TO BE!

corvus · Jul 3, 2003

Quote from Kicking:

What's the point of trying to make 5 NQ points with the risk of losing 10 or 20 points or be caught limit down ?

Or have your trade busted and end up with a position in an unknown state after the bell...

klutz · Jul 3, 2003

Quote from Gordon Gekko:

YOU KNOW WHAT, I'M GLAD YOU THINK WHAT I SAY IS RIDICULOUS! THINK OF THE BELL CURVE. THE MAJORITY IS GOING TO BE HERE BASHING ME--"IT CAN'T BE DONE! YOU'RE RIDICULOUS!" THE SMALL MINORITY AT THE END OF THE CURVE ARE GOING TO KNOW WHAT I'M SAYING. IT WILL APPEAR THAT I'M NUTS, DUE TO THE RATIO OF BASHERS (MAJORITY) TO SUPPORTERS (MINORITY), HOWEVER, I AM RIGHT WHERE I WANT TO BE!

The small majority that you identify with are not at the end of the curve.....................they're more likely around the bend in a nuthouse.

PuffyGums · Jul 3, 2003

http://www.cmerulebook.com/cmewg/wg.dll?page&file=c5

Chapter 5 is the relevant section in the CME rulebook on busted trades. Essentially 6 handles is the S&P No Bust zone. A spike beyond that can be busted. Ususally this is done when cascading stops are triggered by some glitch, but spikes caused by news are allowed to stand.

See section -
CME GLOBEX ERROR TRADE POLICY

"Exchange staff will review the circumstances surrounding the transaction to determine whether the trade should be busted.Â The factors that may be considered by the panel include:Â the market conditions immediately before and after the trade occurred; the volatility of the market; the prices of related instruments in other markets; whether one or more parties to the trade believe the trade was made at a valid price; and any other factors that the panel deems relevant.Â The panel shall make its decision as promptly as practicable.Â The decision of the panel is final."

GLOBEX Error Trade Tick Range List-

This tells you the no bust zone is 6 handles for the S&P.

This policy means that almost all of you (and me too) should not attempt to trade these spikes unless a spike caused by an FOMC annoucement or something like that. Should you successfully trade such a spike, merely covering your trade may not be enough. You need to hedge against the possibility that your covering trade will be busted leaving you net short. You will have to go extra long, adding a position as the market climbs near the no bust range.