Don's Openings, Part 6 2003

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Quote from egusc:


....."countless traders do (open orders) these days"...

...If you look at the size of the open print of the larger NYSE stocks, except for about 5 stocks or so, its not that big. UPS for example a 72 billion dollar company, with 2.6 million shares traded on average a day, had an open print of 20,400 today...
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It seems like you have a couple contradictory statements there. On the one hand, thousands are doing it on the other, there is almost nothing being done on the opening prints. For both of them to be true, those traders would be sending in orders of about 2 shares each.
 
Quote from egusc:



The predatorpro site also has a automatic open order software called Orca, that is preprogramed to set limit order prices for 650 NYSE stocks and can send open only orders right before the NYSE open with one click. The site also states that "countless traders do (open orders) these days" yet less people are making good money at it anymore. "good money" Truer words have not been spoken. Countless people will never make good money doing the same thing.

My bet is that Orca and Raven are good software and people will probably make money using them for a bit, but since this is a no skill trading method, as more and more people with no trading skill think its easy money and are drawn to trade the exact same trade automatically there will be big losers once to many people click the button.

If you look at the size of the open print of the larger NYSE stocks, except for about 5 stocks or so, its not that big. UPS for example a 72 billion dollar company, with 2.6 million shares traded on average a day, had an open print of 20,400 today.

I think its smart for Tony to trade gold stocks with open only orders if few people trade them, but you need to know something about gold stocks too. I like to add stocks after people post how there had losers or stop trading them. I added FRE after Don said he was not trading it anymore until the accounting issue was resolved. That is were the big money is.

Good luck
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I think OO orders work, but you need to do some homework with them. I know that oversold stocks that gap down tend to do better than overbought stocks that gap down (this is a general rule). As an example, I was filled on FRE (long) three days in a row last May and it didn't really work well on the first two days, but on the third day, FRE finally bottomed and it went straight up from the opening. If I remember right, it went up $1.00+ during the first half hour of trading or so. Dates were May22th, 23rd, and 27th.
 
Quote from GapTrader:


...(this is a general rule)....
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Yes it is. Take a look at TYC or EDS when they started getting hammered. There was "no" bottom.

nitro
 
Had a mass of self inflicted troubles today.

I screwed up my opening by forgetting to unlink the input level II window. The inputs kept getting screwed up and telling me I was trying to sell 2 shares for 60800.

I don't use Orca for my OO input, I use my own spreadsheets and secret formulas. So much for automation.

Only got about 1/5 of my orders out. Then canceled some of those since I had some DAY orders mixed in with the OPG orders.

This opening orders stuff with not quite so automated software is a damn fine way to blow up an account if you are not paying close attention..

Anyway, I got 4 fills, 3 winners and 1 loser.

BMY +.08
CCU -.05
F +.10
DOW +.05

Share sizes from 200 to 400.

My backchecking showed that if I had gotten everything in correctly and simply let Raven do it's thing, I would have grossed +$231 on 100 to 400 shares of 291 stocks. All carefully selected in accordance with the phase of the moon.

This would have required me to sit still and wait on T to open, then sit tight from there. No assurances I could have done that. I still have trouble keeping my hands off things, especially winners. Raven kicks me out of losers about as fast as I could get out, and I don't have to mull it over.

Case in point, BMY. I was really tempted to book it when BMY was a good short winner at 26.65. But I sat tight and.... well you guessed it... BMY ticked UP .15... and Raven exits me on the trailing stop. :mad:

Oh well... win some and lose some. If I HAD booked it, it undoubetedly would have ticked DOWN another .15 and then I would have been mad about THAT.

That is the dilemma.... :confused:


We will do it again tomorrow.
 
Bad day at black rock.

Missed the opening again because I thought Raven was malfunctioning. It was not, I just didn't realize it did not start tracking P/L until the 4th tick. I had one fill on a real slow stock and when it didn't fill on the initial downtick, I bailed on all positions.

Missed about $100 gross as a result.

Then I had the one and only copy of predator that had a bullet bug. If I bought a bullet, predator crashed and closed. THAT cost me a pretty penny until I was told to download a new version.

THEN... I tried to trade a little larger size to try to make up the ground. Well, we know how that worked out. Pretty soon I am in a couple of hundred dollar hole, which is huge for me.

Went back to my usual 100 share lot size, and of course THOSE trades worked a little better. But that didn't heal the wounds much.

Oh woe... :(

We'll do it again Monday

( notice I don't complain when things go swimmingly.. :p )
 
Quote from GapTrader:



I think OO orders work, but you need to do some homework with them. I know that oversold stocks that gap down tend to do better than overbought stocks that gap down (this is a general rule). As an example, I was filled on FRE (long) three days in a row last May and it didn't really work well on the first two days, but on the third day, FRE finally bottomed and it went straight up from the opening. If I remember right, it went up $1.00+ during the first half hour of trading or so. Dates were May22th, 23rd, and 27th.
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Does anybody have more more research on this ("some solid facts")? I can vaguely remeber that Lescor checks charts before the opening based on TA. I like to have some statistics before i do anything but this is something I have completely ignored.
 
Quote from nitro:


Yes it is. Take a look at TYC or EDS when they started getting hammered. There was "no" bottom.

nitro
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Exactly. If the gap is truly based on a structural change in the company financials then its more or less a ride down and you had better not be taking positions that rely on bottom picking .....
 
Quote from CalTrader:



Exactly. If the gap is truly based on a structural change in the company financials then its more or less a ride down and you had better not be taking positions that rely on bottom picking .....
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I definitely agree that buying stocks with bad news on the opening can be a very risky proposition. But you don't know how the stock will react to the news until it starts to trade. I would much rather short a stock with good news than buy a stock with bad news. Buying or shorting news stocks on the open can bring some very large gains if they go your way and you have to be willing to stay in to get the big gain (at least $1.00 IMHO) in order to offset the losers, which can be up to 0.50 or greater.
 
While it is counterintuitive to trade the opens on bad or good news it has been my experience that trading the opens with news can be extremely profitable.

Example, this morning there was news that TXN was being sued by QCOM. TXN gapped down and immediately turned into a good winner. Just the same, for stocks with news that I get filled on I maintain tighter stops since it is better safe than sorry.
 
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