Buy Equities at Close, Sell at Open?

catmango · Apr 29, 2004

Does anyone else execute this way? I now have my entries and exits fully automated (through Excel), and I've managed fairly consistent gains (up 35% this year on my account). I find that, at least psychologically and emotionally, it's alot easier for me to be relaxed about my trades, and I feel more comfortable ramping up as well. On top of that, I'm out of the market shortly after the open until it nears the close, so I can enjoy most of the day.

Granted, I'm still holding overnight, and it opens me up to potential huge gap downs (I've experienced it enough times not to be delusional), but I'm reasonably diversified and I've tweaked the system enough to weed out those stocks that might experience a catastrophic event.

Does anyone else enter at close and exit at open, and do you also see the same benefits as I do?

Trend Fader · Apr 29, 2004

What is your risk to reward?

So u are playing an overnight gap?

Doest make much sense.

--MIKE

vikana · Apr 29, 2004

This is one of the "classics" from the late 90s. Worked extremely well for a while.

This type of strategy is super simple to code up, so simply test it out. No reason not to know how it does across a few hundred securities.

Trend Fader · Apr 29, 2004

Quote from catmango:

On top of that, I'm out of the market shortly after the open until it nears the close, so I can enjoy most of the day.

So u are out the second the market opens.. or u wait for some type of predetermined profit target?

rwk · Apr 29, 2004

How do you decide what to buy?

c_verm · Apr 29, 2004

That to me is crazy!

Thats the same as putting you money in a slot machine and pulling handle hoping you get Green at the open or vice-versa.

progers82 · Apr 29, 2004

ive written some good programs for the es where ive entered at close and exited at the open, but after a while, i just could sleep and i would stay up all night so i quit that portion of my trading. sleeps more important than money.

catmango · Apr 30, 2004

Quote from Trend Fader:

So u are out the second the market opens.. or u wait for some type of predetermined profit target?

I'm out probably within the first 30 seconds. The profit is what the profit is. My average return is miniscule, but it's enough to average 2.5% on my account on a weekly basis. When compounded, it eventually adds up.

catmango · Apr 30, 2004

Quote from rwk:

How do you decide what to buy?

I've got my spreadsheet programmed to weed out the list, which is fairly dynamic all day until I freeze the list 5 minutes prior to close.

I don't really want to go into more details than that. This thread wasn't meant so much to discuss the "choosing" strategy so much as the "execution" strategy, which to me has a huge bearing on your psychology. Some people stress out about holding overnight, but I find that I relax more knowing that regardless of the results, I'll be out right at the open. Of course, my attitude could change if we experience another Black Monday.

catmango · Apr 30, 2004

Quote from vikana:

This is one of the "classics" from the late 90s. Worked extremely well for a while.

This type of strategy is super simple to code up, so simply test it out. No reason not to know how it does across a few hundred securities.

Good to hear some confirmation. Easy to back test. I wonder if this kind of thing can continue during an extended bear market, though I'm sure that a similar short strategy can be quite effective. To me, the best advantage is not having to stress all day long daytrading.