Don's Openings, Part 6 2003

egusc · Jan 26, 2003

I had no fills on friday and no fills one day the week before and several one fill days. Fills seems to come and go with Open Orders and so does profitability. The recent lack of fills is a little surprising to me because the market has been volatile and that usually helps OO; more fills and better profitability.

As more people use the OO strategy it loses its effectiveness. Traders need an opening imbalance to make the strategy effective. The size of the gaps decreases, fewer big winners and more losers.

Look at the size of the opening prints, its sometimes about 20,000 to 50,000 shares for a stock that trades 2 million or more shares a day, it only takes a few Bright traders at 2,000 shares to make up a majority of the print. and all but a couple stocks that are good for the open orders print about 100,000 or less at the open and there is quite a small number of stocks that trade enough volume to use with open orders if you want to trade with any size. so 50 bright traders with 2,000 to 2,500 shares and the is no imbalance and 100,000 shares looking to exit right after the open.

The imbalances will return as some traders lose money with the open orders and move on to another strategy. or we get so much volatility that large prints creat big imbalances.

inmate451 · Jan 27, 2003

You know what astonishes me? It is when there is a legitimate strategy somebody gains knowledge of like O-orders and sells it to generate pure trading volume for profit. They kill their own strategy in effect while luring in traders to trade, only to rip off some other traders strategy after they have killed the original one.(keep it alive at any expense)
If you had a golden goose would you be posting here, spilling your guts so every trader can jump in and crush the idea. Hmmmmm, who is selling what??

inmate451

I may be a pesamist, but something is not right here. Day 1 oh great I got filled lost 200, made 230, lost 145, made 265, lost 825 oghh bad day. Please you need to be selling used cars or maybe toupeys. How much have you really lost?? Why are the openings the only thing you trade? Its a good thing you get paid on your PR work and paid per post.

big_jdez · Jan 27, 2003

Quote from inmate451:

You know what astonishes me? It is when there is a legitimate strategy somebody gains knowledge of like O-orders and sells it to generate pure trading volume for profit. They kill their own strategy in effect while luring in traders to trade, only to rip off some other traders strategy after they have killed the original one.(keep it alive at any expense)
If you had a golden goose would you be posting here, spilling your guts so every trader can jump in and crush the idea. Hmmmmm, who is selling what??

inmate451

I may be a pesamist, but something is not right here. Day 1 oh great I got filled lost 200, made 230, lost 145, made 265, lost 825 oghh bad day. Please you need to be selling used cars or maybe toupeys. How much have you really lost?? Why are the openings the only thing you trade? Its a good thing you get paid on your PR work and paid per post.

You obviously don't know too much about the strategy.

Tell me, what's the easiest way to pick up a bar of soap without getting hurt?.

Just in case! Hey you never know!

big_jdez · Jan 27, 2003

Put two orders in today, got filled on one MWD for .25.

First time in a while I've tried the strategy and will look at it closer.

sshakhshir · Jan 27, 2003

got filled on 20

using all high volume stocks

made 1.375

I think the key is paying more scrutiny on a small set of stocks and really reading the AM news to determine significance.

I used to submit about 300 orders (150 long/150 short) but now am focusing on a list of only 50 big names.

Don Bright · Jan 27, 2003

OK, pretty standard day today.....got filled on 4 orders (using a 1.1 envelope) made $460 (23 cents).....FRE was the good one today!!

I don't really want to respond to the inmate...but, come on.... I don't mind others coming into MY poker game, and my traders don't either....this strategy is just one small aspect to a complete trading arsenal....nothing more, nothing less....so let's be cool....and make some money, and have some fun.....

Don

OPTIONAL777 · Jan 27, 2003

sell-outs
You know what astonishes me? It is when there is a legitimate strategy somebody gains knowledge of like O-orders and sells it to generate pure trading volume for profit. They kill their own strategy in effect while luring in traders to trade, only to rip off some other traders strategy after they have killed the original one.(keep it alive at any expense)
If you had a golden goose would you be posting here, spilling your guts so every trader can jump in and crush the idea. Hmmmmm, who is selling what??

OPTIONAL777 :mad:

I may be a pesamist, but something is not right here. Day 1 oh great I got filled lost 200, made 230, lost 145, made 265, lost 825 oghh bad day. Please you need to be selling used cars or maybe toupeys. How much have you really lost?? Why are the openings the only thing you trade? Its a good thing you get paid on your PR work and paid per post

Quote from Don Bright:

OK, pretty standard day today.....got filled on 4 orders (using a 1.1 envelope) made $460 (23 cents).....FRE was the good one today!!

I don't really want to respond to the inmate...but, come on.... I don't mind others coming into MY poker game, and my traders don't either....this strategy is just one small aspect to a complete trading arsenal....nothing more, nothing less....so let's be cool....and make some money, and have some fun.....

Don

Don,

Just wondering if I said the same thing, would you respond to me?

Don Bright · Jan 27, 2003

Quote from sshakhshir:

got filled on 20

using all high volume stocks

made 1.375

I think the key is paying more scrutiny on a small set of stocks and really reading the AM news to determine significance.

I used to submit about 300 orders (150 long/150 short) but now am focusing on a list of only 50 big names.

Good job!! I agree with having a smaller number of stocks , using a larger number of shares, and having a better win/loss ratio. (And to all the naysayers, BT doesn't make a nickel after our traders do 2500 shares, so the "larger number" of shares is in the interest of the traders, not BT).

It's tough to effectively "read the tape" on too many stocks at once. Note that, what may seem "counter intuitive" is that I prefer to place "stop winners" as opposed to "stop losses"....take the profits...and look at the losers carefully...checking out their sector, their RS, and look for any specific news that may apply.....if they're going against me.......

BUT....check this simple comment: Go ahead and cover (even with a loss) IF you think you can get back in at a better price.....the market does allow you to get back in...and the opening strategy is simply a basis for the day....make some money....and then watch your "core stocks" to see how well you can trade them the rest of the day.

Bootcampers are running at about 75+% for the openings (but, alas, the learning curve is still taking a small toll during the day)....good group this time...

Don

Ron In-a-sauna · Jan 27, 2003

no fills today, thought for sure id get something, used a 1.1 today and still entering for about 20 stocks, so iam going on a few weeks now with trouble getting fills even on days like today. should i add more stocks? interested mostly in Don's advice or anyone else with constructive insight....

ler · Jan 27, 2003

The only problem i am having is coming up with a list of stocks to try it on? How does one come up with a list? Do you just take a wild guess and then modify it as time goes on? I feel there must be some sort of way to come up with a list. I have a very generic list of about 100 stocks. I want to condense the list.

You can use any means you wish for stock selection: darts, science, chicken bones, etc. (I use a combination of the last two.)

First, I have a minimum daily volume level I'd like to see. Then I manually inspect the stocks' daily chart in MetaStock using my indicator which shows %change of open vs previous close. I like to see stocks that regularly open with %change greater than 1%, plus or minus.

I know this does not account at all for expected overall market movement close-to-open but it gives me an idea on whether a stock will participate in the strategy or not. There are some real sleepers that rarely will fill using the opening orders strategy and others that will drive you nuts and punish you. I'm looking for something between the extremes.

Just start with a small list and small size and add/change as you go.