Don's Openings, Part 6 2003
- Thread starter Don Bright
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Quote from cashonly:
What 100 stocks are you using? Let us know and we'll stay away from them.
Well, I trade only very liquid stocks, which I think most people do. To trade any size (2K-4K) in stocks with less than an average volume of 800K is difficult (in my opinion, and one fill every second month). So most who do opening gravitate towards the same stocks.
so dont trade OO's
and i disagree with your first point, 20 traders at say 1k each, 20k shares would make no difference on a stock like IBM that trades millions of shares, esp when it gaps it takes bigger volume to gap it in the first place, but 2-4 are valid
Its my opinion that 20 new traders placing open orders at only 20,000 shares in IBM would without any doubt in at least my might make a difference on IBM fills. It might just be 5 to 10 cents, but that is 5 to 10 cents less profit. 20,000 to 40,000 shares in IBM could easily on some days make a 20 to 50 cent change in ibm open prints.
Most Bright traders start trading the open orders in trading boot camp at 1,000 or more and move up to 2,000 to 2,500. Some traders have posted that they trade 5,000 share. So 20 new traders could be 40,000 new shares very easily.
I have place open order in IBM for at least 3 years. I changed to more of a Don Bright system about a year ago. More than 50% of my IBM fills are with prints in the 90,000 to 150,000 share range. I have some fills with about 60,000 share prints and some fills at 500,000 share prints. Many months ago i was fills on IBM a 2 to 4 times a month now i have 2 fills in 2003.
Often there is a very small share size in the open print that creates a large gap in price, much larger than my envelope. There does seems to me to be a slight correlation between fills and larger open prints, but for my 24 stock it just not that strong of a relationship.
I had a fill today in a stock that averages almost 2.5 million shares traded per day and The open print was for 41,000 shares. Last week i had a fill on a stock that averages over 2 millions in volume and the open print was 17,000 shares. I think anyone that trades this strategy will be very surprise by what side on the envelope that they are filled on and the amount of the gap and the print size.
and the effect of more open only traders is not just on the open price it also creates more people tryng to exit a position on the same side of a trade at about the same time. So now there are 20 traders that want to place orders on the same side as you in the first few minutes of trading, so that competition will make profiting more difficult.
Good luck
Most Bright traders start trading the open orders in trading boot camp at 1,000 or more and move up to 2,000 to 2,500. Some traders have posted that they trade 5,000 share. So 20 new traders could be 40,000 new shares very easily.
I have place open order in IBM for at least 3 years. I changed to more of a Don Bright system about a year ago. More than 50% of my IBM fills are with prints in the 90,000 to 150,000 share range. I have some fills with about 60,000 share prints and some fills at 500,000 share prints. Many months ago i was fills on IBM a 2 to 4 times a month now i have 2 fills in 2003.
Often there is a very small share size in the open print that creates a large gap in price, much larger than my envelope. There does seems to me to be a slight correlation between fills and larger open prints, but for my 24 stock it just not that strong of a relationship.
I had a fill today in a stock that averages almost 2.5 million shares traded per day and The open print was for 41,000 shares. Last week i had a fill on a stock that averages over 2 millions in volume and the open print was 17,000 shares. I think anyone that trades this strategy will be very surprise by what side on the envelope that they are filled on and the amount of the gap and the print size.
and the effect of more open only traders is not just on the open price it also creates more people tryng to exit a position on the same side of a trade at about the same time. So now there are 20 traders that want to place orders on the same side as you in the first few minutes of trading, so that competition will make profiting more difficult.
Good luck
Well said, egusc. I've been trading IBM as well, with less fills the last year. It's also less "slingshots" (as don calls it) that it used to be (i have statistics).
One must be rather naive to think that the OO strategy will work just as wll regardless of the number of traders. It still works, but getting increasingly competitive.
Just my humble opinion.
One must be rather naive to think that the OO strategy will work just as wll regardless of the number of traders. It still works, but getting increasingly competitive.
Just my humble opinion.
Been sick, missed Thurs and Fri. Back in the office (barely) this morning. Trying to get well before heading off to NYC for the expo.
I'll do openings again tomorrow.
Back to you then....
Don
I'll do openings again tomorrow.
Back to you then....
Don
i dont trade IBM so i dont know how it behaves, but i was speaking of issues more a long the lines of a GE where a 20k print is commonplace, and nothing to these highly liquid stocks.... 20 new traders would be like one 20k print, and thats pushing it b/c i highly doubt many new bright traders start OO w more than 1000s, many even do 100-200s to start...
guess i just to i see alot of guys posting that they dont like OO's anymore or dont have any success, etc... and wonder why they still trade them then, just stop trading them
I post here to get new ideas and understand the open, which includes what works and what does not work. If you stop trading every strategy that had a bad week you would never learn much.
If you think about it, its much more benefical to the writer to post when thing are not going well. You might learn sometime helpful that could turn things around and make money. Posting about big wins is not as useful to the poster. Maybe i am missing something with my logic.
In my opinion The edge in the open order is lost when too many people place orders in the same stock. The good or great traders like Don Bright with years of experience will still make money but most traders will not. As traders lose money many will stop trading the open and the edge will return.
About the share level for Bright traders in training, Here is what Don posted in Dec. 2002: "My "boot campers" are doing pretty well, and most have progressed to the 1000-2500 share level for the openings. " So many of his traders in training do trade 1,000 or more shares.
IBM is one of the most liquid NYSE stocks, there are only a handful of more liquid stock on the NYSE.
Good luck
If you think about it, its much more benefical to the writer to post when thing are not going well. You might learn sometime helpful that could turn things around and make money. Posting about big wins is not as useful to the poster. Maybe i am missing something with my logic.
In my opinion The edge in the open order is lost when too many people place orders in the same stock. The good or great traders like Don Bright with years of experience will still make money but most traders will not. As traders lose money many will stop trading the open and the edge will return.
About the share level for Bright traders in training, Here is what Don posted in Dec. 2002: "My "boot campers" are doing pretty well, and most have progressed to the 1000-2500 share level for the openings. " So many of his traders in training do trade 1,000 or more shares.
IBM is one of the most liquid NYSE stocks, there are only a handful of more liquid stock on the NYSE.
Good luck
good to see you working at improving, sorry if i had the wrong impression of you, thought you were on of the guys that comes on the thread and just bashes the strategy vs. trying to improve; i hate weeding through those whiney posts when i, like you, come on here looking to pick something up. my OO's have been slipping a little lately too, but still better than .500; i still dont think 20-50k extra shares make much difference in a GE or IBM..i attribute it more too volatility and lack of institutional activity, but definitely its not just one thing liek a few new traders and 50k more shares. soem guys have been doing thse for many years and still do well despite new traders.
FWIW, i have found a lot of it is also the individual stock and am always adding and removing stocks b/c they can change behavior for reasons we have no clue. maybe why i dont trade IBM. btw, i am impressed if some new guys are doing 1000-2500k...thats nice size
maybe don will have some insights for us when he gets back, although he gets these posts all the time...
good trading.
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