[thalestrader]

Originally Posted by brownsfan019 »

I asked Thales how he sets up his day since the universe of stock is so large.

Hi Folks,

For anyone interested in freestockcharts.com, the software I use for intraday charting, I just received an email from them with the following link to some videos on how to use the software.

FreeStockCharts.com Videos

Best Wishes,

Thales

[brownsfan019]

For those interested in using the 20 EMA in their trading, here's a couple threads on the subject:

20 EMA and Patterns

20 EMA Article by Bo Yoder

[AbeSmith]

Stock trading looks interesting. But how do you protect against stocks getting halted? What if you are trading a top loser, it gets halted, and opens back up much higher than before? That could be very costly with a day trading position.

[brownsfan019]

Abe - that is present in any instrument being traded. It's rare, but could happen whether in stocks or futures. I suppose if you are trading a big % loser on the day you might want to be nimble w/ your profits but not sure how often that occurs to be concerned about it.

[thalestrader]

Originally Posted by AbeSmith »

Stock trading looks interesting. But how do you protect against stocks getting halted? What if you are trading a top loser, it gets halted, and opens back up much higher than before? That could be very costly with a day trading position.

The scenario you suggest could indeed happen - you could be short a stock that is halted and re-opens higher, or you could be long a stock that is halted and re-opens lower. However, I think that so long as you are only shorting stocks moving down on higher than usual volume and only going long stocks that are moving up on heavy volume, then the chances of being on the wrong side such a surprise is remote. These stocks are moving in those directions for a reason, and that reason is that whatever news pending that is going to cause trading to be halted is already moving those stocks in the direction to which they will respond to the news once the rest of us become privy to it.

I have had two stocks halted on me over the years, and in each case I was on the right side of the market. In each case, the news pending that caused trading in these stocks to be temporarily suspended was likely already known by some of the larger institutions - hence these stocks were already being bought or sold heavily prior to being halted.

[AbeSmith]

Originally Posted by brownsfan019 »

Abe - that is present in any instrument being traded. It's rare, but could happen whether in stocks or futures. I suppose if you are trading a big % loser on the day you might want to be nimble w/ your profits but not sure how often that occurs to be concerned about it.

But in index futures if your instrument gets halted you can hedge your position by trading in another similar instrument. This can't be done with a stock that is halted on stock specific news.

[AbeSmith]

Originally Posted by thalestrader »

The scenario you suggest could indeed happen - you could be short a stock that is halted and re-opens higher, or you could be long a stock that is halted and re-opens lower. However, I think that so long as you are only shorting stocks moving down on higher than usual volume and only going long stocks that are moving up on heavy volume, then the chances of being on the wrong side such a surprise is remote. These stocks are moving in those directions for a reason, and that reason is that whatever news pending that is going to cause trading to be halted is already moving those stocks in the direction to which they will respond to the news once the rest of us become privy to it.

I have had two stocks halted on me over the years, and in each case I was on the right side of the market. In each case, the news pending that caused trading in these stocks to be temporarily suspended was likely already known by some of the larger institutions - hence these stocks were already being bought or sold heavily prior to being halted.

What about this scenario: A stock moves on heavy volume based on a false rumor, you place a day trade, but stock is halted, and you have no way to hedge your position. Then the real news comes out and stock reopens against you, triggering your stop, but at greater loss than you planned for. I wonder how bad could this loss be? Could it reopen 20% or more against you? That would be a huge loss if you have a day trade in place. Even 5% could be huge. Do you look into the fundamentals of a high volume move to see, for example, if it is based on a rumor or fact?

[thalestrader]

Originally Posted by AbeSmith »

Do you look into the fundamentals of a high volume move to see, for example, if it is based on a rumor or fact?

No. I have no access to news during before and during trading hours.

It is just me, my charts, and my trading platform.