One of the problems I keep facing as a stock trader (I may not be a “beginner” anymore, but I’m nowhere near being an expert) is the volatility at market open. In the first few minutes, a stock can vary wildly in price as the market makers and floor traders handle their pending overnight orders in… I dunno … in an order most likely to cause the most pain. I’ve seen prices go way out, hit my stops to trigger a loss, and then return to around the closing price of the previous day in MINUTES.

But of course, sometimes it’s for real. Like today. Fortunately it moved the direction I had anticipated, but if I’d gone bullish yesterday, what might have seemed like early morning volatility would have simply been a sizable chunk of a big move down.

How do you deal with that? It’s kind of a damned-if-you-do, damned-if-you-don’t situation with stops. As far as I can tell – for now – there is no one-size-fits-all strategy. If there is, I’d like to know it. Maybe the only answer is simply to be there, at market open, watching your positions like a hawk and being familiar enough with them that you can make an accurate guess as to whether or not they are experiencing predictable volatility, or if Something Real Is Happening.