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What the heck happened at 2pm EST today?? Stocks down and up in 1 minute Topic Rating:
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sundaypapertrading
Posted : Wednesday, December 18, 2013 8:19:59 PM
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Joined: 8/30/2012
Posts: 11

Can anyone explain how a FED announcement can cause a HUGE drop in thousands of stocks and ETF's and then an immediate spike within 60 seconds at 2pm EST today?

Were there automated systems out there flooding the queue's with sell orders to get everyone out of their stop/loss orders and then running up the price?

Look at almost any minute chart for any US based stock or ETF and the same pattern is repeated across the board. This can't be a reflection of mass behavior.. can it?

diceman
Posted : Thursday, December 19, 2013 9:54:12 AM
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Joined: 1/28/2005
Posts: 6,049

Just fear and greed crammed into a one minute time frame.

pthegreat
Posted : Thursday, December 19, 2013 12:21:23 PM

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Joined: 6/15/2008
Posts: 1,356

 

http://www.dallasnews.com/business/columnists/will-deener/20131013-algo-traders-execute-orders-faster-than-a-blink-of-the-eye.ece

http://www.youtube.com/watch?v=GEAGdwHXfLQ

 

If you're a daytrader, like me, you have to understand the impact of algo trading. Most of trading is done by computers. Trading firms nowadays don't have "traders", they have people sitting in front of monitors, just to monitor the computers trading.

Imo you can still create an edge as a retail trader.

watch option charts on the high liquid stocks, that's where market moves are made. Massive volume on options need to be ofsetted by purchase of the underlying bu the marketmakers. Hence options direct price movement of the underlying, not the other way around.

I've asked Worden numerous times to include option chains for charting, big shortcome imo.

quick example:

I bought GOOG options minutes before the fed; look at the large volume spikes before the fed:

 

but algos are programmed to look for patterns, among other things. 

Watch the 113% extension, you will be amazed how many times, just after a breakout, the stock reverses at the 113%, and thus taking out stops, and leaving tons of frustrated "breakout" traders in the dust.

 

thekubiaks
Posted : Saturday, January 11, 2014 6:09:04 AM
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Joined: 2/13/2005
Posts: 368

Its pretty much just computers trading any more.  Who knows when an algorithm goes bat$hit....

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