StockFetcher Forums · General Discussion · Market Maker skulldugery?<< 1 2 3 >>Post Follow-up
rrochon
117 posts
msg #28483
Ignore rrochon
9/11/2003 12:28:10 PM

We want to buy a good Muddy or other prospective stock when the market goes green, so it seems natural when we see a good chart after the close that we could put in a buy stop order at one to three percent above the close, and go to bed.

The problem is that when we check it the next morning we can find that it did indeed go up and fill our order, then drop back down before we can put in a stop order to protect against a loss of more than 5%.

Is it possible that some Market Maker sees that open order at, or before, the open and raises the price enough to fill it, sells it to us, and then when the price drops back down he covers his short sale and keeps the profit?

I have also had the same thing happen to me when placing a sell stop order to protect my investment. It drops down, dumping me out, then goes back up and keeps going.

I am a suspicious cuss and wonder if some Market Maker is playing with the market again.

So, what is the solution, other than only using "Mental" Stops, and watching the market from open to close?

Any comments?

Dick


EWZuber
1,373 posts
msg #28484
Ignore EWZuber
9/11/2003 1:18:11 PM

A suggestion. I don't know if this will fit within your strategy but I have found that using the DMI(2) indicator on hourly charts is an extremely reliable indicator signaling the rise of a stock the next morning. I have found that if the DMI+ line is crossed above the DMI- line at the close then the stock will rise in the morning. Sometimes it may be only for a very short time at the open if the market opens down but it puts the odds way in your favor. If hourly chart slow stochastics (5,3) are rising from oversold at the same time then the odds are improved even more for a continuation of the move.

You may be correct about the MM playing games with your order. Money does strange things to people. With the low liquidity in the after and premarkets it leaves you wide open to price manipulation.

The only way I know of to protect yourself from this kind of game might be to buy a protective put to cover your downside.


txtrapper
548 posts
msg #28499
Ignore txtrapper
9/11/2003 10:09:24 PM


rrochon...I read this every day.

KEY TIMES DURING THE MARKET DAY FOR TRADERS

9:30-9:50...Approx first 20 minutes of trading DAY. Time when "beginning traders lose money" on whipsaws and experienced ones capture quick profits. Avoid if you are THE former.

9:50-10:10..OfTIMES a period of reversal for early morning trades. MARKET begins to settle into reality as early morning traders take THEir profits and swing traders look for opportunities.

10:10 to 10:25...usually a continuation of whatever trend was set up in last period.

10:25-10:35 ...A decision point for traders. Many TIMES a turning point reversal or accelerated continuation of previous setup.

11:15-2:00...go bowling...this is THE "dangerous time of DAY" . Traders lunch out and scalpers try to push THE indices around to make a quarter here or THEre.

2:00-2:30...MARKET usually begins to pick up steam:

2:30-3:00...called THE 3:00 bubble, even on weak DAYs can show strength into THE next pivot point

3:05..if last period was just a bubble, will begin to break here, OTHErwise can be a good pivot point.

3:25-3:35...for trending DAYs, this is THE time when trends tend to play out

3:40-3:45...can see reversals or acceleration into THE close. Reason is that all floor traders have THEir MOC orders in and everyone has a pretty good idea where THE closing range will be.

txtrapper




eyoung
42 posts
msg #28500
Ignore eyoung
9/11/2003 10:27:42 PM

ewzuber, what is the name of the indicator using dm(2) dm- dm+, also what is a good indicator regarding overbought and oversold.
thanks in advance
eyoung


EWZuber
1,373 posts
msg #28507
Ignore EWZuber
9/12/2003 2:58:21 AM

The indicator is made up of three parts. ADX, which I believe is an Advance Decline Indicator. It represents the intensity behind the move. In other words if the price is rising but the volume is dropping the ADX indicator will be rising but not very fast. When volume is behind the move it usually maxes out on a good move up. If the stock is falling on heavy volume the ADX indicator will rise to max out also. DMI+ and DMI- are Directional Movement Indicators. These indicate the bullish or bearish nature of the stock. I use a very short term version of this indicator DMI(2). Usually it is expressed as DMI(12) for longer sampling periods which result in less volatile indications.

I believe that Stockcharts.com offers this as a customizable indicator on daily charts. I have found it most useful for me on hourly charts though and is the only place I use it now.


EWZuber
1,373 posts
msg #28508
Ignore EWZuber
9/12/2003 3:11:40 AM

eyoung
Stochastics are the most useful overbought/oversold indicator in my opinion. Everything in nature works in cycles. The stockmarket, being an extension of the human condition, is no different. It has been my observation that it is these cycles that govern the market and they are modified ( or modulated ) to some extent by fundamentals. Williams %R is also useful as a overbought/oversold comparison to stochastics and sometimes will lead stochastics by one day.


EWZuber
1,373 posts
msg #28522
Ignore EWZuber
9/12/2003 11:46:48 AM

rrochon
A comment on you post of 9/11, "We want to buy a good Muddy or other prospective stock when the market goes green"
FWIW, I have made my best buys during times when the market is in the red.


rrochon
117 posts
msg #28526
Ignore rrochon
9/12/2003 1:40:02 PM

Well, it happened again. On 9/8 I bot GSS on a breakout from the Darvas Box and put my stop at 1% below the low of the previous Box.

Yesterday at 10am the price dropped down very briefly and took me out for a 6.6% loss. The price went right back up to a high of almost 8% today.

Damn! I hate to leave a position unprotected, but I can't sit and watch it all day either.

Dick


bob79924
38 posts
msg #28527
Ignore bob79924
9/12/2003 2:12:16 PM

rrochon:
Most technical writers flat out say that anyone who puts in an overnight order is just asking to be taken for a ride. You are right about the specialists. Since they have no commissions to pay, anything at all they can scalp off you, even pennies, is profit to them. They are not limited by the same rules we are. For example, they can sell short on a downtick, which is something outsiders can't do. They can also set the price wherever they want, whatever it takes to grab off your money. I understand your problem of not being able to watch the market all day, but I don't know the solution off hand. Working with larger companies on the NYSE might help, but their lack of volatility would slow down your profits. For that, check the book "What Works on Wall Street" by James P. O'Shaughnessy, ISBN 0-07-048246-2. He ran a computer check over a large span of time and came up with features of best stocks for capital appreciation. Another of his books, "How to Retire Rich", ISBN 0-7679-0073-1, is worth reading also.
Bob W.



TheRumpledOne
6,358 posts
msg #28529
Ignore TheRumpledOne
9/12/2003 4:48:47 PM

NITE has to be the worse of the Market Makers... they traded through my STOPS 3 times on Thursday.. tried to fill me on the way up...

I can't really post what I think of them here!


StockFetcher Forums · General Discussion · Market Maker skulldugery?<< 1 2 3 >>Post Follow-up

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