{"id":23051,"date":"2013-01-11T18:19:36","date_gmt":"2013-01-11T23:19:36","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=23051"},"modified":"2023-04-26T09:47:18","modified_gmt":"2023-04-26T13:47:18","slug":"eliminating-myself-from-the-market","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/eliminating-myself-from-the-market","title":{"rendered":"Eliminating Myself From The Market"},"content":{"rendered":"<p>Whenever I write a piece like this a fear enters my mind that I will eventually &#8220;arb&#8221; myself out of the market. Today INFY had Very Large gap higher. Recently, I did a webinar that addressed this trading scenario from a day and swing trading perspective. I also posted this video on how to trade <a href=\"http:\/\/www.smbtraining.com\/blog\/trading-a-very-large-gap-trade-review-anf\">&#8220;Very Large Gaps&#8221;<\/a>.<\/p>\n<p>My view on these trades are that when there is a huge change in price that isn&#8217;t rejected early in the trading day the stock will continue to trend in the direction of the gap (or at least move sideways). The question becomes how do you define a &#8220;huge change&#8221; in price? Here are a couple of things for you to consider. What does the weekly chart look like? Is the gap greater than 10%? A break in a weekly trend and a gap higher than 10% is a large shift. A gap above 20% is even better. I referenced a few of these charts in my &#8220;New Normal&#8221; webinar.<\/p>\n<p>Here are the two relevant charts from INFY today. The key takeaways from the lower time frame chart is that there was an Opening Drive above the pre-market range. After pulling back in the late morning there was a nice horizontal consolidation in the middle of the day&#8217;s range before a new uptrend began. That consolidation above 51.50 was a chance to nibble on the long side. Based on the way I measure &#8220;legs&#8221; intra-day that second uptrend should get to 53.25-53.50. A close above 52.50 certainly warrants a swing position (it closed at 52.20).<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-2-day-no-lines.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23058\" title=\"infy 2 day no lines\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-2-day-no-lines.png\" alt=\"\" width=\"480\" height=\"348\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-2-day-no-lines.png 800w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-2-day-no-lines-300x217.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-2-day-no-lines-250x181.png 250w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/><\/a><\/p>\n<p>The important aspect of the weekly chart is the break of a major downtrend. If you want to see some other good examples check out ANF and GMCR. I mentioned CREE in my last webinar as another possible candidate for a large move if it were gap above its weekly downtrend.<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-weekly-no-lines.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23065\" title=\"infy weekly no lines\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-weekly-no-lines.png\" alt=\"\" width=\"480\" height=\"348\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-weekly-no-lines.png 800w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-weekly-no-lines-300x217.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2013\/01\/infy-weekly-no-lines-250x181.png 250w\" sizes=\"auto, (max-width: 480px) 100vw, 480px\" \/><\/a><\/p>\n<p>So my focus on these setups are capturing moves in the direction of the gap. I understand from an intra-day perspective there are opportunities to capture counter trend trades. I don&#8217;t talk or tweet about them as it is harmful to our trading desk. Developing traders have a VERY strong desire to fade trends. If I was a neuro-scientist I would do the research on exactly why this is the case. But I&#8221;m pretty sure people&#8217;s brains are wired to want to fade. And the way SMB combats this wiring is to constantly drill following the trend into their heads.<br \/>\n<a href=\"http:\/\/twitter.com\/sspencer_smb\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p>Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com.<\/p>\n<p>If you are interested in developing the trading skills necessary to capture short term moves in stocks take a look at the <a href=\"https:\/\/www.smbtraining.com\/blog\/SMB-Foundation-Training-Program\">SMB Foundation training program<\/a><\/p>\n<p>No relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whenever I write a piece like this a fear enters my mind that I will eventually &#8220;arb&#8221; myself out of the market. Today INFY had Very Large gap higher. Recently, I did a webinar that addressed this trading scenario from a day and swing trading perspective. I also posted this video on how to trade &#8220;Very Large Gaps&#8221;. My view &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/eliminating-myself-from-the-market\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":23058,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,456],"tags":[],"class_list":["post-23051","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-steven_spencer_steves_blogs","category-trader_development"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Eliminating Myself From The Market | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/eliminating-myself-from-the-market\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Eliminating Myself From The Market | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Whenever I write a piece like this a fear enters my mind that I will eventually &#8220;arb&#8221; myself out of the market. Today INFY had Very Large gap higher. Recently, I did a webinar that addressed this trading scenario from a day and swing trading perspective. I also posted this video on how to trade &#8220;Very Large Gaps&#8221;. My view ... 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