Don's Openings, Part 6 2003

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Trading OO's is a numbers game. Just because you had 1 day with a result (good or bad) means nothing.

I do agree with you that you MUST keep track of the spoo level when sending, and when the market opens - or else you can get lots of fills especially when you are out 1.5 points or more.

Manual exits, rather than a hard 10 cent trailing stop means that you have to KNOW your stock (specialists). IF you are using a 10 cent stop, I am sure that you have not taken the time to learn the behavior of your stock. I would suggest reading the tape and watching your stocks prior to manual exiting, so that you know when he is faking ya, and when he is going to punish you.

All the best
PQ
 
Shoulda stayed in bed.

KG -.02

SAP +.02, bailed fast, didn't want it, thought I had taken it off the list.

I notice that most of the news stocks would have really killed me today.

Not getting many fills, and most of the ones I am getting are treating me poorly.

:confused:
 
Quote from TonySanDiego:

Shoulda stayed in bed.

KG -.02

SAP +.02, bailed fast, didn't want it, thought I had taken it off the list.

I notice that most of the news stocks would have really killed me today.

Not getting many fills, and most of the ones I am getting are treating me poorly.

:confused:
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Last few days have been lackluster. It's just this kind of thing that "shakes" people out and then things turn around. Seen it happen again and again. This is good for us "consistent" players who are in there every day slugging it out.

Cash
 
Quote from mdl060374:

alos, I have been using a .10 trailing stop that has kept my losses low, but stopped me out of potential big winners.
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mdl,

I would strongly encourage you to look at some of those. I don't know what stocks you are trading, but do throw in a bit of volatility adjustment. Your results will thank you. In my own trading, I've seen some stocks go from complete dogs to stars, just by giving them a bit more room. Realize, though, that on any given day, you could get smacked for your bigger stop and then some....

Ideally, you should take your volatility calculations based on the first 15 minutes of every day (do that in something like WealthLab or Tradestation). Alternatively, make a comparison using data provided by iVolatility (www.ivolatility.com). These Historical Volatilities are close-to-close based on daily data, but the relative difference between stocks is what you are after.

Price can be a rough starting point: MMM will need a much bigger stop than AMD. But take that a step further. For example, JPM is only about 75% the price of C, but yet the daily volatility of JPM is just about the same...

JPM HV20=20.36% @ $34.86 yields 45cents/day
C HV20=16.22% @ $44.50 yields 46 cents/day
(data from http://www.ivolatility.com and http://finance.yahoo.com)
 
"...do throw in a bit of volatility adjustment." [italics added]

and

"...take your volatility calculations based on the first 15 minutes of every day."

and

"...the relative [volatility] difference between stocks is what you are after."

Everybody doin' a little tweakin', now...? :)
 
Quote from DaveN:



mdl,

I would strongly encourage you to look at some of those. I don't know what stocks you are trading, but do throw in a bit of volatility adjustment. Your results will thank you. In my own trading, I've seen some stocks go from complete dogs to stars, just by giving them a bit more room. Realize, though, that on any given day, you could get smacked for your bigger stop and then some....

Ideally, you should take your volatility calculations based on the first 15 minutes of every day (do that in something like WealthLab or Tradestation). Alternatively, make a comparison using data provided by iVolatility (www.ivolatility.com). These Historical Volatilities are close-to-close based on daily data, but the relative difference between stocks is what you are after.

Price can be a rough starting point: MMM will need a much bigger stop than AMD. But take that a step further. For example, JPM is only about 75% the price of C, but yet the daily volatility of JPM is just about the same...

JPM HV20=20.36% @ $34.86 yields 45cents/day
C HV20=16.22% @ $44.50 yields 46 cents/day
(data from http://www.ivolatility.com and http://finance.yahoo.com)
More...

Geez, I feel like all my children are all grown up and leaving the nest....with all this good advice, I can leave an extra few minutes every morning to my own trading.

Don :p
 
Quote from DaveN:



mdl,

I would strongly encourage you to look at some of those. I don't know what stocks you are trading, but do throw in a bit of volatility adjustment. Your results will thank you. In my own trading, I've seen some stocks go from complete dogs to stars, just by giving them a bit more room. Realize, though, that on any given day, you could get smacked for your bigger stop and then some....

Ideally, you should take your volatility calculations based on the first 15 minutes of every day (do that in something like WealthLab or Tradestation). Alternatively, make a comparison using data provided by iVolatility (www.ivolatility.com). These Historical Volatilities are close-to-close based on daily data, but the relative difference between stocks is what you are after.

Price can be a rough starting point: MMM will need a much bigger stop than AMD. But take that a step further. For example, JPM is only about 75% the price of C, but yet the daily volatility of JPM is just about the same...

JPM HV20=20.36% @ $34.86 yields 45cents/day
C HV20=16.22% @ $44.50 yields 46 cents/day
(data from http://www.ivolatility.com and http://finance.yahoo.com)
More...

thanks guys.. all great advice. I really havent even looked at the stocsk, since I am getting so many fills on diff ones each day. I am playing more of an "averages" game with sto plosses, etc...
 
Quote from mdl060374:



thanks guys.. all great advice. I really havent even looked at the stocsk, since I am getting so many fills on diff ones each day. I am playing more of an "averages" game with sto plosses, etc...
More...

I suggest (only suggest) that until you're really having consistent winning weeks, that you try sticking to 20-30 stocks (hoping to get filled on 3 or 4), and then you'll be able to learn how those stocks trade....and remember, the day is not over at the opening....so this also helps you pick out stocks that trade like you want them to, so you can better "read the tape" and trade them well.

Don
 
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