| | | | Why I Don't Trade in Pre-Market Hours
Author: Corey Snyder, Publisher
"The greatest trick the devil ever pulled was convincing the world he didn't exist."
- Roger "Verbal" Kint, The Usual Suspects (1995)
That's a big commitment... saying that I won't trade in pre-market hours.
Let me be more specific...
I won't trade pre-market unless certain conditions are met.
And it's rare that it happens.
A few years ago, my joint work partner and I were leaving our firm's office to meet a client…
We had close to a thirty-minute drive.
Like most of my day trades, this was a micro-cap with hardly any float…
I'm talking somewhere under twenty million...
Now, I've always kept alerts for certain price thresholds and news. My phone does all the recon before reporting back to me.
And on this day, the stock was moving — at least, it appeared to be.
Using my phone, I jumped in during the early hours before market open with every intention to sell later on after the meeting…
...at a profit, of course.
By the time I'd gotten back, I realized there would be no such thing.
Like so many gap-up moves in pre-market trading, my position had fallen after a "gap-up fade"...
You Lose
No scapegoating here. In that trade, I brought a knife to a gun fight.
(If we're using trading lingo, maybe it's the other way around...)
Was I scarred by this pre-market trade, vowing to never get in early ever again?
No. You will lose in trading. That part's inevitable…
You just have to keep it limited and make sure you win more often and keep the wins sizable.
Unfortunately, the early hours can put you in a position to lose more than you expect…
After all, the combination of volatility and low liquidity makes it a hunting ground for those with a short bias.
Now, my criteria for taking a pre-market trade is nitpicky to some, but if you're looking at putting on a position before you're even dressed for the day, you may want to consider the following:
- Dollar Volume - Sure, the stock may have a decent amount of movement and there are a few more shares traded than usual. But how much actual money is showing up for the party? Follow the money.
- Catalyst - Certain news can make a stock climb the chart while other announcements are just enough of a catalyst to invite a stop loss raid. If it's not game-changing news and won't add to the company's bottom line, it's probably better that you finish your egg whites and oatmeal.
- Spread - If there's a wide spread, chances are that you'll be dumped on. The spread between the bid and the ask will tell you right away if you're going to run into a liquidity problem, thus making you settle for less than you bargained for.
Of course, there are other factors that need to be accounted for…
At the very least, look at the daily chart to find key areas of support and resistance and where the trend is headed.
This alone will help you from doing the thing where you lose money…
And look, I completely get the temptation to buy in pre-market... The early bird gets the worm, right?
Sure.
But sometimes there's a snake hiding out just a few feet away and he's been waiting for you all morning...
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| | | | | | | Chris gives his thoughts about what might happen to the market in the near term. He emphasizes the futility of picking market tops and why the best practice is to trade the chart... not your opinion.
This episode has a few tips and tricks that will really open your eyes when it comes to building profitable trades over time.
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| | | FINAL PRINTS: The Major Indices Wrap-Up |
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| Index
S&P 500
Dow Jones
NASDAQ
Russell 2000
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| Weekly +/-
-25.59
-22.84
-71.52
+9.32 |
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| % Change
-0.57%
-0.07%
-0.47%
+0.42% |
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| Close
4,432.99
34,584.88
15,043.97
2,236.87
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| % YTD
+18.02%
+13.00%
+16.73%
+13.27%
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| | | MARKET WHISPERS: The Weekend Scoop
- COMING UP: Food Fauci and Drug Administration Booster Answer - Although the vaccine advisory panel ruled against booster shots, Dr. Anthony Fauci wants to be clear that the big decision will be made this coming week. Pfizer (PFE) and BioNTech (BNTX) both fell when the panel stated that booster shots were fine and dandy for those 65 and up, but not so much for the rest of the public. With the CDC set to opine on the matter and President Joe Biden pushing for more shots, we'll be watching the put/call ratio and taking bets.
- "Back to Fun" With the Carnies - Carnival Cruise Line (CCL) (the one with overcrowded pools) celebrated in New Orleans on Sunday with the city's first cruise line departure since March of 2020 when the pandemic began. City officials along with Carnival executives threw a "Back to Fun" ribbon-cutting party and welcomed guests onto the Carnival Glory cruise ship. The cruise line anticipates an increase in the amount of cruises from Port of New Orleans with an estimated 400,000 customers annually. But they could be overestimating the power of Guy Fieri's restaurant, Guy's Burger Joint, as a featured attraction.
- Airplane Bottles Not Allowed On Airplanes - There have been reports in the past of garbage and miscellaneous items being left on Boeing (BA) Air Force One jets, but the latest left-behind items could cause some problems. According to The Wall Street Journal, two airplane bottles of tequila, once full of joy and bad decisions, were found empty on a new Air Force One plane that has yet to be completed. Boeing stated the incident is a personnel matter since alcohol isn't permitted in the facilities. "Sorry boss, I figured 'airplane' bottles would be okay."
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| | | | | Did you miss Options Coach Chris Hood's landmark event? Chris does a deep dive into his cornerstone strategy that has been paying him every week for years...
Click below to watch now.
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| | | HIT OR MISS: Who's on Deck for Earnings
- Monday, September 20th - Lennar Corp. (LEN), Cognate (CGNT), Great Elm Group Inc. (GEG), Red Cat Holdings Inc. (RCAT)
- Tuesday, September 21st - Autozone Inc. (AZO), Stitch Fix Inc. (SFIX), Aurora Cannabis Inc. (ACB), Adobe Inc. (ADBE), Fedex Corp. (FDX), Cracker Barrel Old Country Store Inc. (CBRL)
- Wednesday, September 22nd - Blackberry Ltd. (BB), Kb Home (KBH), General Mills Inc. (GIS), GSX Techedu Inc. (GOTU), Nexters Inc. (GDEV)
- Thursday, September 23rd - Rite Aid Corp. (RAD), Accenture (ACN), Nike Inc. (NKE), Costco Wholesale Corp. (COST), Micron Technology Inc. (MU), Carmax Inc. (KMX), Darden Restaurants Inc. (DRI), Dynatronics Corp. (DYNT), Aehr Test Systems (AEHR)
- Friday, September 24th - Tarena International Inc. (TEDU), Uxin Limited (UXIN)
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| | | Enjoying Dawn Report? Learn something, made some money?SHARE YOUR STORY WITH US OR TELL US HOW TO SERVE YOU BETTER.Let us know at info@rogueinvesting.com |
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| | | | | | | | | | Copyright © 2020 Rogue Investing. All Rights Reserved. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Rogue Investing.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. By downloading this book your information may be shared with our educational partners. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Rogue Investing.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. An InvestPub Company. |
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| HIGH RISK WARNING Trading foreign exchange, stocks, options, or futures on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. RogueInvesting.com provides general advice that does not take into account your objectives, financial situation or needs. The content of this website must not be construed as personal advice. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.You should seek advice from an independent financial advisor. Past performance is not necessarily indicative of future success. |
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