DowJones Interference

[Raymont 10]

Hi Guys,

I trade on the ASX. Has anyone else noted that if the Dow Jones has closed down overnight that prices have to fall in Australia too, as if Aussies cannot make a buying decision without the OK from Wall Street?

I've been having a hard time lately by making really nice entries into promising positions one day, only to find that they go bad if the Dow Jones is down the night after. I find it difficult enough to trade one market, let alone two at once.

How do others cope, psychologically, with this?

 

Thanks,

Ray

[Raymont 10]

OK, I guess this doesn't apply to most traders here.

[diablo272 10]

I'm not sure what you're asking here. All world markets and their actions are interrelated, because each market is trading off of more or less the same information. The ASX isn't somehow isolated from the rest of the world just because it's based in Australia.

[uexkuell 10]

If it is consistent, why not enter short then?

[Raymont 10]

I'm not sure what you're asking here. All world markets and their actions are interrelated, because each market is trading off of more or less the same information. The ASX isn't somehow isolated from the rest of the world just because it's based in Australia.

 

The markets trade partly on financial information, but psychological factors are hugely important.

A relatively small market like the ASX is far more likely to trade down after a negative overnight result on the Dow Jones than vice versa. Similarly, investor confidence in the New Zealand markets is more likely to be influenced by trends on the ASX than vice versa.

No, different markets do not react unemotionally to the sum total of the financial state of the world.

[diablo272 10]

I've decided to remove my post here.

Edited June 3, 2009 by diablo272

[BlowFish 10]

Maybe close out on market close? Maybe the positions are not as promising (for your holding period) as you think?