I was out on the West Coast interviewing some candidates at UC Berkeley last Friday. It sure was nice out there! Mid 70s in the middle of November, really? Oh boy do I miss that awesome weather!. One of the interviewees with a bit of experience in trading his own account asked me a question that I thought was interesting. … Read More
Flat Before the Number?
After the Close our desk had a spirited debate about whether a trader should have a position before an announcement (in this case the oil and gas number). On Tuesdays we meet after the Close to watch video of One Good Trade produced by a few of our experienced traders. One of our most improved traders, let’s call him MIT, … Read More
GS: Too Hard?
Most new traders should not be trading GS. GS is a very difficult trading stock. The spread is 30c to 50c. It reverses often intraday. There are programs that make it difficult to hit new lows. Trading with size is near impossible. Only the very best of set ups are profitable. GS is broken. And it has been since it … Read More
A Fundamentally Poor Trade
Never short a stock very close to an important support level. Let me explain. 88 is a very important support level for GS. Tuesday the stock leaked below 88. But it could not hold below 88. Later the stock rallied strongly. A few on our desk shorted GS when 88.30 held the offer. This is a fundamentally poor trade. Let’s … Read More
Make This Trade
Goldman Sachs (GS) is significantly weaker than the market right now. Just a few examples: On October 29th after having rallied strongly for two days it gave back almost all of its gains in one day; as the S&P has consolidated and shown strength the past few days GS has sold off sharply on negative chatter; it dropped four points … Read More
“Rut” = Kick in the Butt, Swift Knee to the Gut
Dictionary.com defines a rut as, well the third definition at least, “a fixed or established mode of procedure or course of life, usually dull or unpromising: to fall into a rut“. And that is exactly the definition I was looking for. Like any human being I get into ruts. Which is fine, since that is human nature, no? But I … Read More
Overvaluing Recent Events
Here’s a really good article about overvaluing recent events. For a trader it is instructive. I say this because one of our new traders sent me an email recently: “I know my big weakness is trading on the Open. Do you have any suggestions on how to improve or what to look for in order to increase my morning productivity?” I … Read More
Standing in Front of a Freight Train
I am not sure why but too often traders fade moves like yesterday into the Close. The market bounced over 800 points during the last two hours of trading. I was talking with an experienced trader after the Close and came up with a theory. Traders tend to miss the beginning of bounces. The market has been weak. The market … Read More
