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Gap play...a 2 handed demonstration

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Not applicable
some of you may be tired with my fascination with gap plays....some I know still wonder how they work...not very often you get a first hand living demonstration of the forces at work...this morning I had such a rare opportunity. I have been mentoring two friends who have started trading futures contracts....so this morning I get two panic calls ...one from someone who was long overnight and one who was short. We were on a skype conference call and have been staying in touch like this all day. The one was saying...Shiiite I am down 10 grand should I sell...the other was saying ..."I am up 10 grand should I sell"..... well after the lecture about how stupid this was I said...to the one do nothing and to the other I said buy. The both told me I must be on something so the one sold and the one did nothing.....for a while that is ....then as the one saw their profits decline they started buying and the one that sold saw the error of their ways also started buying in order to get long...this despite my almost point by point admonishment for the one to do nothing and the other to buy at the open. So a 10 grand profit turned into nothing and a 10 grand loss stayed a 10 grand loss (and increased the loss as they panic bought)....I hope this kinda shows how gap plays work....and how when the panic sets in you need to stay calm and not just go with the most obvious kneejerk
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15 REPLIES 15
john_1
Super Contributor
So how is that mentoring going then!
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Not applicable
John....I know the thread is a bit long for your attention span but hopefully now they understand how gap plays work.....
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earlyret
Regular Contributor
not tired, fascinated. really seems to be a good percentage.wish I had the time during the day to follow and trade the gaps, and wish I understood a tad more.
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INTTHEMONEY
Contributor
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DavidG
Contributor
Have to keep your thumbnails short and out the way...
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Not applicable
You take the gap trade this morning chartist?
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Not applicable
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scandal
Super Contributor
which means you went short or long on the futures ??
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Not applicable
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john_1
Super Contributor
Stuburn this morning huh! Why oh why, stand in the way, just let the damb thing close so we can all go make money on the long side.
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Not applicable
John the rallies are selling opportunities!
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john_1
Super Contributor
Maybe, truth is it is gonna move hard one way or the other. my money is on the upside
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asylum
Super Contributor
you are spot on john went up. also went short at 27710 now where should one have a stop on this as its already moved 100p past my target i know youre gonna tell me i should have a exit strategy which i have but it seems i may be placing my stop to far away, any views appreciated thanks
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Not applicable
Short ??? then iam look at wrong chart but how knows ? been long sinces yesterday gap has closed with a Quick spike. hmmm had to be quick to get out on it. FTSE to test 60.00. Good luck gents !!!
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