A 70k bet that I can't make a 50% gain in 2009
- Thread starter geez
- Start date
Geez,
Can you talk a little bit about how you think about the trades at the start of the day.
Say you have your longs and your shorts in order and the market opens and does its thing for the first half hour. You're watching and looking for setups. What are you looking for in terms of an opening?
Say you have some long candidates...a few names that have been trending up but have sold off the last couple of days. Then, they gap up 3% or so at the open, or they just open strong and move straight up. Are you still looking for a pullback to set that stock up for a trade? Clearly, you won't be buying that at the low of the day. So, are you just looking for a decent size pullback or any pullback? Or, would a strong open make you shy away from that name?
Or, say the stock opens down so as to continue the trend of the last couple days. Do you look for a little rally and then re-test or do you move away thinking that maybe today isn't the day for the reversal to start?
Basically, what are you looking for at the start of the day for your longs and/or shorts? I'm not talking about the specific setup, just more the action that you'd like to see at/near the open (1st half hour) to keep you interested?
Thanks.
Can you talk a little bit about how you think about the trades at the start of the day.
Say you have your longs and your shorts in order and the market opens and does its thing for the first half hour. You're watching and looking for setups. What are you looking for in terms of an opening?
Say you have some long candidates...a few names that have been trending up but have sold off the last couple of days. Then, they gap up 3% or so at the open, or they just open strong and move straight up. Are you still looking for a pullback to set that stock up for a trade? Clearly, you won't be buying that at the low of the day. So, are you just looking for a decent size pullback or any pullback? Or, would a strong open make you shy away from that name?
Or, say the stock opens down so as to continue the trend of the last couple days. Do you look for a little rally and then re-test or do you move away thinking that maybe today isn't the day for the reversal to start?
Basically, what are you looking for at the start of the day for your longs and/or shorts? I'm not talking about the specific setup, just more the action that you'd like to see at/near the open (1st half hour) to keep you interested?
Thanks.
Snake,
You hit upon a very good point here.....it's one thing to have a good watchlist, it's another thing to trade that list.
If I am looking at certain stocks long and they gap down and/or the market gaps down I like to be aggressive and look to get in early. I have a few entry styles for this:
1. Like BBT yesterday, I buy over the 1 or 2 minute high it makes and put a stop at the low.
2. If the stock moves lower I will buy over the FIRST green 5 min bar it makes (1st reversal). I did this on the short side withWLP on friday...it was extended to the updise on the daily chart, gapped up and moved up from the open. I shorted under the FIRST red bar.
3. Wait for the first higher low and buy.
If the stocks I want to go long on gap up, that is a different story.
You have to be patient and wait, sometimes missing the whole move all together. This happened to me the other day on PRU:
I liked PRU short (was #1 on my list), but in the morning it gapped down and just kept moving down..finished down $5.00. This will happen...it's part of trading.
But, to get back to how I would enter:
If a stock I like long gaps up, I wait for any higher low it may make. I disregard all short setups on it and just focus on long setupson it. I stick to my bias long all day on it. Like yesterday, my bias was long on alot of banks. Even though the banks sector moved lower, I played the higher lows on FITB FAS and BBT.
Another favorite play of mine is this:
let's say the market opens weak and moves lower, but the stock I am watching long is staying rel. strong. If the stock is basing, or pulling back just a little, I will buy it as soon as the market starts to reverse to the upside (usually 20-30 min after the open).
I know it's hard to visualize these, but there were some good examples in the past week of my trading.
My best advice is, be patient when the stock does not give an entry early, but continue to watch it throughout the day...you will probably get an entry at some point. But, when things are lined up in you favor (like BBT yesterday) jump early....
Hope this helps-G
PRU was #2 on my list for Monday (WHR was #1), and waking up just before the open, I too saw the gap down and figured I'd wait for a bounce to short it, never happened, just dropped all day.
Friday it had made an and of day hard run up into the close continuing a five day bull run. When I see those end of day runs I sometimes short at the close for the morning pull back. If I had been in town actively trading last Friday, this would've been my prime candidate for that play.
Do you ever consider that, or do you feel the overnighters are too risky?
Funny how often we're in the same place.
At the exact same time you did LVS I was buying MGM..Took some size and sold already.
Good luck
At the exact same time you did LVS I was buying MGM..Took some size and sold already.
Good luck
Geez,
Thanks for the thorough response, that was very helpful.
One other question came to mind when reading that. If you have a long bias on a stock and it opens weak and acts weak all morning, will you change and go short if you see a good setup? Or, do you just keep the long bias and just not trade that stock?
Thanks for the thorough response, that was very helpful.
One other question came to mind when reading that. If you have a long bias on a stock and it opens weak and acts weak all morning, will you change and go short if you see a good setup? Or, do you just keep the long bias and just not trade that stock?