Just to be clear. I bought the CI on isld before the opening (yes, breaking a cardinal rule), and sold it at about 39 (before it went to 35), took it off my screen.....my bad...
Don
Don's Openings, Part 5
- Thread starter Don Bright
- Start date
Just to be clear. I bought the CI on isld before the opening (yes, breaking a cardinal rule), and sold it at about 39 (before it went to 35), took it off my screen.....my bad...
Don
don can you share more on enveloping.i still struggle with it.i get some 10 cent winners but that one big loser that you cant get out of takes it all back.
example yesterday.i was enveloping S.at around 3:12 i got hit at 25.50 but it was just the beginning of the tank.before i could get out it was 25.20.how can you get the ones you want to be hit on and yet avoid the big loser that is tanking for good reason while enveloping.
Did ok on opening orders today.
2 shorts 2 longs.
COF short +.60 had an order in to catch it.
ZMH short +.31 ....and left some on the table. It dropped nicely, then stalled and started to retrace a bit. Got out right at the top of the retrace. I was truly trying to read the tape, but it was showing nothing I could decypher.
AFL long +.50 same as COF, had an order in
HCA long +.50 same thing, it hit a standing order.
Certainly can't complain today.
I had the standing orders in because I was also trying to get some opening indications on NE, CCU, and AET (sympathy for CI)
NE indicated 31.00 x 32.00, put my order in at 31.3, it opened at 32.00. It turned out to be wobbly at that price, so I am glad I missed it.
ZMH was the last guy standing which is why I had a chance to try to read the tape.
2 shorts 2 longs.
COF short +.60 had an order in to catch it.
ZMH short +.31 ....and left some on the table. It dropped nicely, then stalled and started to retrace a bit. Got out right at the top of the retrace. I was truly trying to read the tape, but it was showing nothing I could decypher.
AFL long +.50 same as COF, had an order in
HCA long +.50 same thing, it hit a standing order.
Certainly can't complain today.
I had the standing orders in because I was also trying to get some opening indications on NE, CCU, and AET (sympathy for CI)
NE indicated 31.00 x 32.00, put my order in at 31.3, it opened at 32.00. It turned out to be wobbly at that price, so I am glad I missed it.
ZMH was the last guy standing which is why I had a chance to try to read the tape.
vhehn, no offence dude, but that's just shit trading.
first of all the market as a whole is tanking.. which should've been your first warning sign.. so maybe you could've avoided the long side of the envelope all together..
but in any case, if you were hit at 25.50, you could've got out for 10c profit almost immediately... which is the idea with this strategy..
just what the hell you were doing holding till 25.20 i do not know..
(wanna tip on how to guarantee getting out? market order..or limit 10c below the bid)
well it looked like you could get out but the specialist wasnt filling.a while later i saw that news of a lawsuit hit the wires.
thats the problem with enveloping as i see it.i had a .19 envelope.the specialist did a 20 cent gap down.
are you saying to only envelope the long side when the market is going up?dont think it works that way.why would the specialist hit your bid below the market if the market is rallying?
do you actually do enveloping?if not i prefer to hear from those that do.tia.
no, i'm not saying only do long side when market is rallying. you can do it anytime. the thing is, imho, you went long against a decidedly decent selloff. might work sometimes, but you're making things harder for yourself.
why does the specialist fill orders below the bid or above the ask? that's the question to answer. have a think about it. (has to do with NYSE market structure and floor procedures..) *and one more point, the specialist doesn't hit your bid. pull out that nyse rulebook..
fact is, it happens. now, if that trade you had talked about occured when nothing much was happening (direction wise) in the broad market, or your stock's sector, by all means, hold on for a larger gain... but... that was quite a counter trend trade you took there, so you really should have sent in your sell order the second you got filled (if you couldn't get stock, guess what, you were LATE)... those are not the times to sit around hoping.. Don would call this the "slingshot" effect... and it really is what you are trying to take advantage of when you are playing envelopes..
now, personally, i don't trade this way. i feel the method is too labor intensive and takes me away from my core strategies with what i'm trying to do in the market. and i don't regard it as a strategy to just be applied blindly all hours of the market, come what may.. don may disagree with that... but even a cursory glance at intraday price movements will show that at some parts of the day the market is making moves where it's best to just get right out of the way... (spoos just drop 3points in seconds, you're holding onto your 10cent gap down long, for example... just get out!)
although i'm pretty confident everything i've said is rock solid, feel free to disregard any or all of it...
I completely agree with your point, the fills that go against you and just keep right on going will kill returns. There must be some clue that can tell u if you are on the same side as the specialist when u get your fill. To me this is the key, if you are filled and the specialist also used his shares then, 1. he would not use his shares unless he likes the trade and 2. the specialist is on your side and will work to turn a profit.
I use this envelope strategy from time to time with stocks that i consider value stocks and then only to buy. Mostly stocks that have lower volume and sell at a price that i feel is reasonable. I have had good sucess with GTW using enveloping of 500 to 1000 shares when GTW is under $3.
Good luck
Enveloping requires constant work. Use "cance if close" orders (small joke)...we cancel when the bid/offer creeps to the price we have entered, and try to only get hit when there is a bigger drop or rise from the prior bid offer.
For example, on Tuesday I entered about 285 orders, and was only filled on about 80 or so. I would buy at, say xx.20, and then bid xx.10 and offer at xx.32. If the bid on the stock came down to xx.12, I would "update" the xx.10 to xx.05 or so. By keeping this up, and never adding more than a couple of times in the same direction, we can do well during those days (too many days sometimes) of "troughing" up and down in a certain range.
The same "rules" apply to individual stocks as always. We monitor relative strength, momentum, sector, etc. If you're doing this manually, it is a bit intense to do it on more than 1 or 2 stocks at a time. If you automate, you can monitor more stocks easily. I suggest that you get a high success rate manually before attempting automation.
Hope this helps!
Don
For example, on Tuesday I entered about 285 orders, and was only filled on about 80 or so. I would buy at, say xx.20, and then bid xx.10 and offer at xx.32. If the bid on the stock came down to xx.12, I would "update" the xx.10 to xx.05 or so. By keeping this up, and never adding more than a couple of times in the same direction, we can do well during those days (too many days sometimes) of "troughing" up and down in a certain range.
The same "rules" apply to individual stocks as always. We monitor relative strength, momentum, sector, etc. If you're doing this manually, it is a bit intense to do it on more than 1 or 2 stocks at a time. If you automate, you can monitor more stocks easily. I suggest that you get a high success rate manually before attempting automation.
Hope this helps!
Don
Don, I think it is high time you began a new thread called "Don's Opening Part Six."
I was hoping to keep this until year end....
Where did you get my brother's picture??
Don
Where did you get my brother's picture??
Don