Just thought id share a little scalp i had lat night on wall street, and i will include a statement to prove that i did do it.
Last night, i was watching wall street cash, and had thought about opening a short earlier on to hedge my longs from yesterday, i missed my oppurtunity during the day, and so decided to try and scalp some money from the index to cover myself that way.
Now we all know that wall street is looking very bullish with its close over 10,000. There were alot of reports due last night which could have a huge impact on the overall index's performance. I think it was around 9.30 last night, i noticed the index start to drastically fall from a decent move up which i have circled and labaled 1.
Now you have to ask yourself, why has this happened? there are no reports due for an hour? obivosuly some information has been leaked that the reports will be bad? that seems far to obvious doesnt it? So my thinking is that the people who may have this information, have started to try and create some fear, to get all the bears out of the market, to better position themselves for realease of the reports. it looked succesful. Based on the previous nights report frm JP morgan, there was every likelyhood that the companies earnings would exceed tonight as well?
So unlike everyone else, (apparently), i saw this as a perfect positioning point, and i entered a long position at the spot labeled 2, this was 5 mins before the reports were due. i set a stop loss 10 pips below entry, and had a target of 1059.
I came about this target by using a fibonacci extension, i took the high of 10029 - the low of 9,963, x by 0.618. then to be slightly conservative i dropped it back 10 ticks to account for spreads and then 1060 being a round rumber. And thanking my lucky stars, the high was 1059!
I dont know if i got lucky, but its seemed to follow my plan and thinking very well.
So I have used a bit of techincal analysis and psychological analysis to scalp the market, does anybody else, use a method similar to this?