Page 348 - THE MARKET WHISPERER

344 PART 10 - Winning Trades

that you realize the profit or the loss, driven by just one thought: get past
the pressure! Wrong! That’s about the worst mistake you can make. In the
greatest majority of situations, you will receive a better price during the
first five to fifteen minutes following the opening of trade.

SMART Pre- or post-market trading inherently contains multiple
MONEY risks and in the long term does not pay. We do not trade
before or after trading hours, period!

In 2010, with the stock exchange reaching peak prices over a 14-month
period, and after eight straight weeks of unstoppable price rises, I was

invited to a television financial program in my capacity as analyst. While all
other analysts predicted continued increases, I predicted a 10% pullback.
The next day, the market rose another 1.1%. The next day, the wheel came
full circle. I was spot on! Within several days, the market dropped by 8% and
provided us with an amazingly successful week of shorts. By the weekend,
I realized that the drop had been extremely sharp, and must retrace at least
a little. For the weekend, then, I positioned myself in three stocks which
I estimated would retrace upwards more than all others: Apple (AAPL),

Goldman Sachs (GS), and TEVA. I waited patiently for the opening of trade
on Monday. An hour before trading opened, I took a look at the pre-market
status. I couldn’t believe what I saw on the trading platform: the market
was opening with gap up, the size of which I had never seen before…4.5%!
For my account, the gap established a pre-market profit of $28,000! That’s
when my hands started to sweat and my pulse began to race: what to do
next, sell at pre-market or wait?

I have already taught you that at this stage you must never sell, but
instead wait. But just for this one occasion, I wondered if I should bend my
own rules. That would require no more than hitting the sell button and all

the pressures would evaporate. And such a lot of money! I didn’t give in.
I waited. One hour later, some ten minutes after the opening of trade, the
profit jumped to $36,000 and I locked in almost all of it. For the first time
that day, I took a deep breath. Not bad for one hour’s work. What might

have happened if I were a novice trader? I have no doubt that I would not
have been able to withstand the pressure, and would have sold in the pre-
market. Remember that pre-market buyers buy in the pre-market because
they believe they will see a better sale price during regular trading hours.

They are usually the top level professionals, and they are almost always

right.