Don's Openings and More for 2006

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here's my take...

stocks in an index close make up the closing price of that index...

so it is from the prior nights close that i base my envelope...both sides of the opening...with the percentage change of the future...

if the component stocks of the index make up its value then they should move in tandem with the futures...

if they don't... then i have a trade...

if the stock moves from its "component value" due to news or earnings it is avoided by blocking orders on that stock on that day...

i hope this doesn't sound too esoteric but it is actually pretty plain vanilla on further observation...
 
Understood and thank you.

I guess the reason for asking if anyone had any statistics on it was for the following:

Let's say over a one year period, 1,000,000 of the shares you traded were buys when there was a premium and sells when there was a discount.

If those 1,000,000 shares turned out to be scratch and you then subtracted your costs of .01 per round turn of shares, then those trades cost you about $10,000 out of your pocket.

If a particular strategy cost money to implement, then obviously we would not want to use it.
 
Something to consider. One of our longer term traders analyzed all his openings very meticulously last year....and then compared his results from the previous 2 years. He found no correlation to "buys" vs "sells" (for profits), no correlation between up or down openings, and found that he did better the first two years when he wasn't worried about all the detail work....so, analyze away....but keep "doing" - I think you'll find random profits.

Don
 
Chiguy,

Just curious (no criticism intended).

How do you lose $250 on hon?

I was filled on my ss @ 36.50, high of the day was .74.

With-in a few minutes in dropped right back down.

I just scratched the trade at b/e, but I was wondering what your stop loss exit parameters are.

Thanks for your help as I haven't been doing this strategy long and info on how others trade this has been of great help.
 
not a problem...

i actually lost 240.00 on hon...oops

sold short 1000 @ 36.50...

put in an 36.74 stop as i scrambled on my other positions...

the nyse was more than happy to set off my stop while i was busy elsewhere...

bingo...i bought the top of the day...

sometimes you can't watch everything and you get hosed on your stop...and sometimes it saves your skin...most times though they are not too bad...
 
thanks,

have you tried making sure your stops are on the other side of the nickels?

ie: buy stops at the sixes and the ones...sell stops at the fours and nines. sometimes it helps, but not always.
 
i'll give it a try...

i usually put then in either just behind a big order or just in front if i am not quite sure of liquidity...
 
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