Don's Openings, Part 6 2003

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Quote from Ron In-a-sauna:



wondering what stocks you held for the day b/c they most likely would have to be longs, and my only long fill was a dud... just wanted to compare notes
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some guys cancel all shorts when they think there's going to be a strong up day or vice versa...

I prefer to place orders on both sides and let the execution of the order determine which side to cancel (which occurs automatically)

generally, execution in active stocks occurs in the direction of the trends, and to some non-consistent extent, less active stocks execute opposite to the trend...

try not to premanipulate your spread premarket, and just enter both sides of the orders and see what executes...
 
Quote from PhoenixTrader:



some guys cancel all shorts when they think there's going to be a strong up day or vice versa...

I prefer to place orders on both sides and let the execution of the order determine which side to cancel (which occurs automatically)

generally, execution in active stocks occurs in the direction of the trends, and to some non-consistent extent, less active stocks execute opposite to the trend...

try not to premanipulate your spread premarket, and just enter both sides of the orders and see what executes...
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OK, thats great, but had nothing to do with what i was asking.

was just wondering what stocks you held onto all day yesterday b/c the stocks i follow that filled at the open from the long side were duds, and the shorts would have blown you out holding all day
 
Phoenix seems to have the right idea on the entries....don't bother cancelling due to market conditions (just be aware of stock specific news, RS in the sector, etc.).

It sounds like Ron wants to know what stocks were held all day.....that's up to you if you want to say....

Our over-riding strategy is to "cover" IF you can get back IN at a better price. It tends to "clear the head' and you can get on with trading...enveloping etc. Looking for trade throughs....

Heck, I cover sometimes, and then get right back in a few pennies away....and at least I saved those few pennies, even if I'm wrong.

Good Luck to you all...

Don

BTW: Friday +182 (9 cents)....
 
Dear Sir,

I have gone through all 54 pages of the MOO strategy. I would like to confirm the following:

With the MOO strategy one places buy limit or sell limit opening only orders based on fair value calculations based off the emini futures. This is done on roughly 20 stocks that are liquid before the open.

The limit prices are adjusted for preopening indications inside of the top or bottom 1/3 or they are set mostly around 1% above and below the fair value calculated. Tighter envelopes if lower volatility prevails or more fills desired.

The theory of success is that whatever side is filled, that is the side that the specialist is on and therefor you have an edge based on the fact so does he. Once executed you look to exit with a profit or cut the loss.

Is the above synopsis correct and also how would your brother calculate the fair value?

Regards, :D
 
Quote from WECoyote:

Dear Sir,

I have gone through all 54 pages of the MOO strategy. I would like to confirm the following:

With the MOO strategy one places buy limit or sell limit opening only orders based on fair value calculations based off the emini futures. This is done on roughly 20 stocks that are liquid before the open.

The limit prices are adjusted for preopening indications inside of the top or bottom 1/3 or they are set mostly around 1% above and below the fair value calculated. Tighter envelopes if lower volatility prevails or more fills desired.

The theory of success is that whatever side is filled, that is the side that the specialist is on and therefor you have an edge based on the fact so does he. Once executed you look to exit with a profit or cut the loss.

Is the above synopsis correct and also how would your brother calculate the fair value?

Regards, :D
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you have it close. if you go back a few threads there are some very good examples of how its done. this is part 6 thread. do a search for the first five.
 
WECoyote

Don't be fooled by being "on the side of the specialist." As near as I can tell the specialists often don't have to take a position because there's enough liquidity being provided by traders doing OOs. At best it's probably 50/50 now + the cost of commissions.

Just look at all of the stocks that have opened up higher than FV the past few days/weeks/months and gone higher without a single pullback. This is a perfect example of how a trading system gets ruined when too many traders get in. I suspect that a year or two ago, a day like this would have been like having a magic money machine.

Oh, and if you are going to base your orders on indications... be careful there, too. I hear there were over 90 stocks today that opened in the top 33% of their indication and went higher. IMO, indications are often used to either scare traders away from the real opening price or to sucker them into providing liquidity.

You can read back through all six journals, the bottom line is this strategy is not what it used to be.

Jack
 
These days you have to trade according to the futures a lot more (after you're filled). Which is probably a sign of less participation from the specialist.
 
Quote from JackHamptom:

WECoyote

Don't be fooled by being "on the side of the specialist." As near as I can tell the specialists often don't have to take a position because there's enough liquidity being provided by traders doing OOs. At best it's probably 50/50 now + the cost of commissions.

Just look at all of the stocks that have opened up higher than FV the past few days/weeks/months and gone higher without a single pullback. This is a perfect example of how a trading system gets ruined when too many traders get in. I suspect that a year or two ago, a day like this would have been like having a magic money machine.

Oh, and if you are going to base your orders on indications... be careful there, too. I hear there were over 90 stocks today that opened in the top 33% of their indication and went higher. IMO, indications are often used to either scare traders away from the real opening price or to sucker them into providing liquidity.

You can read back through all six journals, the bottom line is this strategy is not what it used to be.

Jack
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Actually, the program for our new people is working better now than it has in the past. We simply look for smaller profits (with bigger size)....

Strategies like this have been around for decades, and will work better sometimes and not so well sometimes....but it gets the trader trading, and with a profit for the most part.

Then we move on to something else!!

Don
 
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