Extreme stock price moves: would you buy or sell? - Trading-Lab

BuyLowSellHigh · #1 07-12-2007, 06:50 PM

hello all,

I like to trade stocks which either dropped or increased a lot due to unexpected news. In other words, movers and shakers. I like being on the opposite side. If the stock dropped a lot, I like to buy and the opposite. I usually hold them for a 1-2 day swing trade until dust settles.

what do you think of this strategy. most stocks retrace violently after falling/rising fast. does anyone trade this way?

cheers

MomentumTrader · #2 07-13-2007, 09:15 PM

did any stock ever go against you BAD for doing this? Meaning, it kept on going in the original direction without looking back?

BuyLowSellHigh · #3 07-18-2007, 07:48 PM

hello momentumtrader,

yes it did. But it's the overall results that count, isn't it? I occasionally take a quick loss on the ones not "behaving"……..

milo · #4 07-25-2007, 07:20 PM

how do you determine whether the stock has stopped running and about to bounce back? Price and volume analysis or indicators?

BuyLowSellHigh · #5 08-02-2007, 05:30 PM

I use a combination of level analysis together with a few indicators. Basically, if price is very close to a very important support/resistance level and indicators suggest an overbought/oversold situation, I take the trade and set my stop loss right above/below the above mentioned key levels.

StockOperator · #6 08-24-2007, 04:40 PM

you seem to employ a very simple trading method which is good since simple things are what work in trading. Still, my gut feeling tells me this might be one of those strategies where you make money most of the times and then you lose it all on one bad trade? am I wrong? doesn't it sound similar to what a selling naked options kind of strategy would offer, in terms of risk/reward?

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#1 07-12-2007, 06:50 PM
BuyLowSellHigh Junior Member Join Date: Jun 2007 Posts: 20	Extreme stock price moves: would you buy or sell? hello all, I like to trade stocks which either dropped or increased a lot due to unexpected news. In other words, movers and shakers. I like being on the opposite side. If the stock dropped a lot, I like to buy and the opposite. I usually hold them for a 1-2 day swing trade until dust settles. what do you think of this strategy. most stocks retrace violently after falling/rising fast. does anyone trade this way? cheers

#2 07-13-2007, 09:15 PM
MomentumTrader Junior Member Join Date: Jun 2007 Posts: 14	did any stock ever go against you BAD for doing this? Meaning, it kept on going in the original direction without looking back?

#3 07-18-2007, 07:48 PM
BuyLowSellHigh Junior Member Join Date: Jun 2007 Posts: 20	hello momentumtrader, yes it did. But it's the overall results that count, isn't it? I occasionally take a quick loss on the ones not "behaving"……..

#4 07-25-2007, 07:20 PM
milo Member Join Date: Jun 2007 Posts: 41	how do you determine whether the stock has stopped running and about to bounce back? Price and volume analysis or indicators?

#5 08-02-2007, 05:30 PM
BuyLowSellHigh Junior Member Join Date: Jun 2007 Posts: 20	I use a combination of level analysis together with a few indicators. Basically, if price is very close to a very important support/resistance level and indicators suggest an overbought/oversold situation, I take the trade and set my stop loss right above/below the above mentioned key levels.

#6 08-24-2007, 04:40 PM
StockOperator Member Join Date: Jun 2007 Posts: 32	you seem to employ a very simple trading method which is good since simple things are what work in trading. Still, my gut feeling tells me this might be one of those strategies where you make money most of the times and then you lose it all on one bad trade? am I wrong? doesn't it sound similar to what a selling naked options kind of strategy would offer, in terms of risk/reward?