Quote:
Originally Posted by RainMaker
Is this all over Greece having to potentially default?
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Computer trades, if you trigger enough 'slide' indictators the computers which are too tightly tuned to minute changes will tend to go bonkers. This further ruins the indicators causing less tightly tuned computers to trigger, and so on and so forth.
Usually there is a sharp correction afterwards because other systems have been waiting for certain price thresholds so they can load up long. These get rapidly triggered as the price drops (as it covers more price thresholds) so you see a lot of bids come in at various levels and generally the price stabilizes near to where the majority of bids are placed at. Of course, this level is below where the market used to be at by definition (it may temporarily over correct but it usually levels to the 'average bid').
I'm currently long a lot more than a couple days ago because of this. I don't run off micro-indicators, but I often set up auto-trades to work on thresholds similar to these computers. Unfortunately, mine don't execute as fast as them (I got a few lucky hits at the right points in the blip, but probabilistically I mostly have to settle with the before and after the blip price levels, still a good 3-4% of movement in most cases).