A trader explains how he shorted Google by watching pre-market auction activity and order flow. He monitors the European session and 24-hour futures to read sentiment before the US market opens, then trades only the first hour using those signals to time entries.
Yesterday I was trading Google. I had a Google short, I believe. I won the trade. But as I was leading into the session, I could see every time it was getting bid up, there was a huge seller in there and it was coming down. And then like basically even prior to the open, because I watch it like very, very carefully, I was seeing gaps down. You know, I was sitting there thinking that sometimes this is where the trading gremlins get you. I was thinking if I entered that pre-market order and won it by the time the market opened, I obviously waited and it worked out fine for me yesterday. But that all came from the auction.
When you say the auction, is that at the market open or is that just throughout as well?
Let's say, for example, we're heading into US Open. I'll look at the European one first. And see how it goes. And because we've got the futures markets as well, we can look at 24-hour charts and stuff leading into it. I will take that into account as I'm heading into the US Open, but I do only really trade for the first hour of the day.
