Don's openings Part 3

I missed WYE this morning damn!!. It never looked back this morning. The guys I've been training all caught it but I had the macro on my program make a mistake and enter an order to buy around 9 and instead of 38.90. I was tweaking my automation software recently and that cost me .50

Oh well

Always tomorrow and at least I'm still net positive today :)
Robert
 
Two questions for those OO experts out there:

Where do you find your BETA and how often do you update the BETA? Example. Do you use BETA from Yahoo, PC Quote, TradeStation? Is the BETA from ayearly average or some type of moving average.

Do people base the envelope on the buy and sell side based on the BETA, or use a direct % based on FV.

Thanks.

Dave
 
Originally posted by DaytraderDave
Two questions for those OO experts out there:

Where do you find your BETA and how often do you update the BETA? Example. Do you use BETA from Yahoo, PC Quote, TradeStation? Is the BETA from ayearly average or some type of moving average.

Do people base the envelope on the buy and sell side based on the BETA, or use a direct % based on FV.

Thanks.

Dave
More...

A rough estimate or average "beta" will work fine. If you think about, you probably just want to have a slightly wider envelope on a "tech stock" than a utility company stock....

Don
 
Following on Don's suggestion about a relative envelope spread, you could do something as simple as taking a normalized Average True Range (ATR/Close) ratio of that stock to a major index like the $SPX. It's easy to calculate based on readily available information, and you have the added benefit of being able to understand (and tweak, if you like) the method for expanding or contracting your opening envelopes. It's also easy to program into a spreadsheet, rather than making manual adjustments. I'd rather tweak my algorithm than keep making manual calculations.
 
Two questions regarding the opg orders.

At what point would you cancel the outstanding orders on stocks that haven't opened? On one hand, the specialist could be having trouble getting it open in which case it might be a great trade. On the other hand, the stock just hasn't opened and the futures have moved quite a bit so you really are not capturing the fairval play. How do you play it?

I like your "slingshot" idea and it seems to work out pretty well -
If you are filled and place a slingshot, how often do you cancel it if the tape/market starts moving in your favor?

Thanks for your posts - they have been very helpful.
 
Originally posted by fivestar20
Two questions regarding the opg orders.

At what point would you cancel the outstanding orders on stocks that haven't opened? On one hand, the specialist could be having trouble getting it open in which case it might be a great trade. On the other hand, the stock just hasn't opened and the futures have moved quite a bit so you really are not capturing the fairval play. How do you play it?

I like your "slingshot" idea and it seems to work out pretty well -
If you are filled and place a slingshot, how often do you cancel it if the tape/market starts moving in your favor?

Thanks for your posts - they have been very helpful.
More...

It really depends on what is holding up the opening, and what other stocks in the same sector are doing after they opened. If LLY hasn't opened, and has some bad news, but MRK opened and is doing well, then I will probably leave the order in. This also gives you a chance to see what the overall market is doing.

If the stock is going to open down, and market is weak, I may lower the bid or cancel altogether.

Thanks,,,!!

Don
 
Originally posted by dafugginman
how did you do today don?
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Rough day, did well on GE (+600), but got stubborn on TXN and lost it back...kept trading and did ok....Net loser of about $220 .....

Don

(Sorry, but it happens)....
 
sorry :-) ....i was just curious because i have some of the same stocks as you, such as TXN, LLY, AOL, and BMY. i don't trade the other ones that you do. i'm thankful you
shared the strategy, even though i've yet to capitalize on it.

personally, i'm cutting down my list to 10-12 from over 20 until i get more proficient. today, i had three winners turn to scratch/losers while i was managing things that were moving against me, such as your TXN.

today i had seven fills, but there have been several days when i've had 9, 10, and 11 fills, resulting in less than optimal exits, to put it mildly. i only have two monitors, so i can't even fit more than a few montages on my screen, so tape reading just isn't possible. you were right, around 4 would be optimal.

have a good weekend
 
today was a gross and net loser. Hate these days but they happen.

What threw me off today was the S&P's had gapped down about 5 or 6 points. Within the first minute the S&P's went up 6 points to completely fill in the gap. This means my longs should be pulled higher but I won't want the shorts based on a fair value of the S&P's 5 handles lower. I canceled my remaining shorts only to see the S&P's freefall right back down to the gap.

I prefer the days where we gap extreme, I tend to do much better.

Robert
 
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