Don Bright's "Core Positions"...

[Longhorns]

Quote from Sanjuro:

'Core Position' at Bright refers to a long term position that takes advantage of the 8% avg gain in the market each year. They trade around the position but try to keep the same number of shares going into the close.

Market is going down, I'll sell a few thousand, and buy it back few cents lower.
Market is going up, let me add a few thousand and sell it after a few cents up.

There are traders at Bright who scalp GE for 2-3 cents everyday for thousands of shares while holding a core position of 10,000 shares. They never sell a purchase at a loss and just hold it till it comes back. They say they don't have to worry about it because they know GEs fundamentals and it's safe.

Good Luck!

That is one of the worst trading strategies I have seen in quite sometime (just my $.02).

 

[Choad]

Quote from Sanjuro:

They never sell a purchase at a loss and just hold it till it comes back. They say they don't have to worry about it because they know GEs fundamentals and it's safe.

Heh. This is Mr Market's "strategy"....

He has NEVER had a losing trade (or for ET'ers - loosing )!!!

Mr Market is HUUUUGE!!!!!!

 

[GTC]

What are the specific ways to know if institutional buyers are buying/selling?

 

[Surdo]

Autex and Bloomberg

 

[Lights]

ditto. also, over 250 trading days in a year, you avoid massive total in slippage (it can add up significantly) and retain the superior entry point. this one concept changed my trading this year.

Quote from Mike805:

1. No. It has plenty relevance to short term trading IMO.

2. Yes, I always trade around a core position. I never enter with full size and I always adjust my cost basis pending the trade's positive or negative movement.

 

[Don Bright]

Quote from fatrat:

I called Don Bright's radio show about 2 years ago when I first started to have an interest in the stock market. He said he trained his traders to manage a "core position." I didn't think much of what he said, up until recently when I started to re-evaluate how I exit my positions.

Does this mean that they pick key levels, look for institutional buyers, and then grab as many shares as they can? If it goes up, they off load a little bit. If they see more aggressive buying, they add a little more? Anyone know if their suggestions for "core position" management are documented anywhere? I googled, but couldn't find much. My exit strategies need a lot of work.

Well, I have to say that it feels a little weird to be spoken about in the third person...and to see the wide range of responses to a simple part of an overall trading strategy...and while taking Mr. Schey's comment with a grain of salt (especially since he hasn't been part of our Firm for a long time, but will likely return as have so many in the last few months)....There is still hope for you, Mike...LOL (keep smiling, you know we've always liked you)...

The "core position" can be a couple of hundred shares of your "children" - and children are the 2 or 3 stocks that you trade on a daily basis...sort of like becoming a "Surrogate Specialist" - you may be looking for the mentioned 8% return, while being able to make "fair and orderly" markets on both sides of the equation.

Often times you will be long, sometimes short however (when you see action in the stocks "peers")...(and, BTW, we allow 6 times your equity overnight with no haircut charge when traders are partially hedged, as most good traders are....very few successful traders are "naked" long or short for long, 2% per YEAR for 6-12 times your equity, 4% per YEAR for 12-18 times equtiy, etc)....these positions are simply to augment, not replace, your overall trading style.

This methodology has morphed into pairs trading, and allows newer traders the opportunity to develop skills in that arena as well.

Things change....perhaps this is of interest: "Adapt or Die' article from the magzine.

http://www.stocktrading.com/Adapting.html

I must say that I am glad to see some "real" trading discussions going on...so much "nonsense" here at times....

Back to it...

Don

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[Don Bright]

Quote from GTC:

What are the specific ways to know if institutional buyers are buying/selling?

By watching the tape closely, you'll see the block prints, and the NYOB will often show "levels" of pricing where the accumuation or distribution of these shares takes place.

Don

 

[fatrat]

Quote from Lights:

ditto. also, over 250 trading days in a year, you avoid massive total in slippage (it can add up significantly) and retain the superior entry point. this one concept changed my trading this year.

Can you post a sample of some core position management, or maybe discuss the rules behind how you like to manage your core position?

I attempted to do this in SSP today, when I shorted underneath $47. I kept offloading shares 5-10 cents away, partially. Then when it came back up, I'd short again. Repeat, over and over. It was just a "go with the flow" kind of thing. But, I still think I can do it better than I did. Some examples would be great.

 

[fatrat]

Quote from Don Bright:

By watching the tape closely, you'll see the block prints, and the NYOB will often show "levels" of pricing where the accumuation or distribution of these shares takes place.

Don

Is there any way to learn how many shares an order from the floor has to it? I suppose I can go back through the tape and study this, but it seems like it's random how much a floor guy will dump at any given level.

Also, I'm curious if you can explain how traders use VWAP[I think that's what it is] to get large numbers of shares.

 

[Don Bright]

Quote from fatrat:

Is there any way to learn how many shares an order from the floor has to it? I suppose I can go back through the tape and study this, but it seems like it's random how much a floor guy will dump at any given level.

Also, I'm curious if you can explain how traders use VWAP[I think that's what it is] to get large numbers of shares.

You're looking more for simple volume at pricing levels. Brokers may have 100,000 shares to sell, but only reflect 10,000 at a given price level. Watch for 10,000 (or any other "block print"), which "should" eliminate the quoted offer, but doesn't...if they keep printing large size, then obviously, there is much more stock to go at or near that price level.

Don