Don's Openings, Part 6 2003
- Thread starter Don Bright
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Quote from NYNY:
I believe in the long run it might be better to not trade Opens when the futures gap down 1% or more.
I do not have enough data to say that objectively BUT today plenty of stocks opened up 1%+ from their fair value price BUT it was still below the previous close. Hence, no "money making" short positions. If there was no short sale rule I would made a killing. I wish they would get rid of that fucking rule.(a little bitter)
So if the market gaps down 1%+ and sells right off (LIKE TODAY) the risk reward just isn't there. In fact it might be against you.
Just my .02.
why dont you just buy yourself a bullet and not be so bitter...
not if its making you money, if i even made money on slightly more than half for every bullet i bought, id buy as many bullets as i had great trades...
from you rtone it sounded liek you could be making some great trades and raking it in if you could ONLY get an uptick..well your not gonna get an up tick, esp. if its going to be a great trade so suck it up and by the bullet you cheap bastard (in jest), lol
It is pretty rare to actually need bullets for the sell side....we try to widen the envelope whenever we have a big down (or up) day..........
If you're going to use bullets, use them on your "core stocks" only....that way you get your money's worth....by using them the rest of the day. A valuable tool, as pointed out....
Don
If you're going to use bullets, use them on your "core stocks" only....that way you get your money's worth....by using them the rest of the day. A valuable tool, as pointed out....
Don
Widening the envelope would not do anything. On days like this, if the stock opens on an uptick my "ordinary envelope limits" will still get filled(since the open is greater than them)...the problem is 95% of stock will open on a downtick.
After thinking about it... On days when the market is going to gap down 1%+ I could set up an alert to tell me when a stock opens above my short envelope(but on a downtick) and immediately go up a bullet and sell within 10 seconds. Of course this is not ideal but it is better than nothing.
Its no problem if the stock open on upticks. Out of the 65 stocks I watch only VZ opened on an uptick.(made good money on it)
but if your envelope is <=1% and the fair value is <-1% ALL of your short envelopes will be below the previous close.
If I set up an alert I could have gone up a bullet for FRE and it would have been a sweet day.
BUT of course this only has to do with days when the market is gapping down more than 1%... which is rare.
The "indication" (or alert) is a good idea....but remember also, that the "envelope" is 1% on each side of FV, which is pretty wide (or .5, or .8 or whatever times 2).
OK, enough "paralysis by analysis" as Nike says...."just do it." LOL....
Don
OK, enough "paralysis by analysis" as Nike says...."just do it." LOL....
Don
whats funny here, is people taking a strategy like the OO's that is so simple, and make it so complicated...i think its more difficult to make the OO so comlex, vs. just putting your time and energy into just trading the dam thing...
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