Important lesson for everyone who trades Crude

augubhai

Well-Known Member
#4
Augubhai yester day i lost 15000 .in that gap.
Shashi, sorry to here that. I was also short, but luckily I has a SAR Stop Loss at 3888 that was filled without any slippage. Due to the Stop Loss I became long in a moment, and that more than made up for the loss in my short position.

Crude did not take even a second to increase by about Rs. 70. If you look at the PIB charts you will find a big gap, like there was no trades in between that 1 second.

Play safe by having Stop Losses. Part of the lesson, I guess...
 

piyush08

Active Member
#8
Beware of sudden gaps when the US market opens. See the gap today at exactly 6 PM India Time. All technicals were pointing down, but then look at the sudden gap up.

The image below is from Netdania.


Dear Mr Augubhai ya jo bhi bhai... and other who agree with him.. what do you guys just bring some capital and start trading a product without doing any research about it or the market... Are you guys like totally clueless data releases in US. How do you guys survive without even knowing the basics boss !!

Ok, read and learn. Most of the commodities on MCX majorly move in the evenings. Why? Cause that's when traders in US come start trading and they bring in volumes, liquidity, trend and momentum. In short they decide where price goes. Asian and European traders hardly determine meaningful price movement.

What time do these traders come in - There is no fixed time per se, like 6pm or something. Usually movement starts building up around 5:30pm and continues till 9:30 after which market quietens down majorly. Crude is the only market which still has decent movement after that. For 4 months a year when DST is applicable this time shifts one hour ahead from 6:30-10:30pm.

Economic data releases - There are regular economic data releases in US, some of which are trivial, some slightly important and some majorly market moving. The biggest of them is the Non farm payrolls (Employment data), which comes out on the first Friday of every month at 6pm IST. In case of DST (the time when MCX closes at 11:55pm instead of 11:30pm), the release is at 7pm IST. So now go back and check what 5Aug2011 was. It was the first friday of August, and at 6pm NFP data came out. Which is why the huge gap up. Go check the charts of other commodities. There must have been huge moves in Copper, Gold, Silver, Lead, Zinc, Nickel everything. NG is the only one which doesn't react at all. If you are trading through this release and holding positions its your damn fault. Who do you even survive trading through news release. I am amazed. What, nobody in domestic markets knows all this stuff or what?

In August only on one friday there was the downgrade of US Sovereign ratings by S&P after market close. MCX is open on saturdays. Sat morning I was expecting huge gaps in all markets, but everything opened flat. I couldn't believe the prices. I just shorted crude/copper and bought gold at the open. People sitting here in India were just ******* clueless. I made 5 lakhs that day. What an easy trade. Wake up guys !!!