DislikedHello guys, what the **** just happened? Stock futures looking dire atm, and I still can't find any particular info on the web. Must be something pretty bleak to cause such an additional drop after a day like today.Ignored
You will often see this in the very thin market after NY and before Tokyo, and also just before or into the European open.
The big banks will move the market past where obvious stops will be and flush out the weak long or shorts. Those people not institutions who are not trading with 300 pip stop losses and dollar cost averaging into and out of their positions to move their basis of the trade..... people like you and me.
It didn't take much to move EU through 1.2850 when there is virtually no liquidity. Below will be sitting a bunch of stops, that all get taken out. When you get a European opening and its sitting at say 1.3007, they will run the price down or up past 1.2985, or 1.3015 to flush out weak players sitting on tight (er) stops.
Knowing this, you can take defensive measures. I hate it though as I went flat to avoid whipsaw during noisey thin session, and now I may not get back to an entry point, but probably will, as the sharpness of that 40 point drop is artificial.
