Opening Orders - 2008

Quote from VinMan:

Sorry all this has been covered but need to ask again.
I have approximately 30 stocks on my list, all high volume names. I am enveloping based on FV. I am using no stop, basically stopping manually, crutching or trading out of losers but I have a 25c stop in my head (adjustments for some stocks +/- 25c). For retracements I use 6c for 50% of he position and 25c for the second 50% (some adjustments based on stocks). I have, at times, used a hard 25c stop as well.
My question is am I at least on the right track here? Should I reasonably expect to make money using this (as I get better and continue to adjust)?
Am I on the right path?
What should an opens trader need as a win rate, win% vs loss % to be successful.
I bet many beginners get shaken out with the "up one day, down two, up 3, down 3" swings. Is this expected?
Any help for a newbie is greatly appreciated!
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My win ratio is around 75-85%. Let's take 75%.
Expectation = sum(probabilities*value)
Expectation = (37.5% * 0.25$ + 37.5% * 0.06 + 25% * -0.25$)
Expectation = 0.054$ on average.
So, yes you have positive expectation. But you have to play with the numbers because you wont have 25 cents on all your winners and you may not want to loose 25 cents on all losers, can be more or less.
Also, you can get price improvement on your 0.06 take profits and that can help you.
Every once in a while you can get a big loser. You have to work on catching them before by reading the news or tape reading. Sometimes there is nothing you can do.
But if on average you lose 25 cents on your losers, then the minimum average you need on your winners to be flat is about 8 cents per share.
So, I think you are on the right track. Just analyse the losers and try to understand what went wrong and what you can do about it, if you can. You wont be able to cut all losers, they are part of the cost of trading.

Good luck
 
I'm not going to tell how much anger I feel about my damn broker (IB) this morning. I'll just take a line to thanks him for freezing the quotes from 9:30 to about 9:35. Thanks, it really helps me.
Did anybody else experience that?

6 fills, 4 longs, 2 shorts, 3 winners, 3 losers. Could have been all winners had I understood that only the quotes where frozen but the orders where still executing. But I'm no wizard. +0.07 average.
I did cancell all remaning orders when I realised that something was going wrong. Been a little slow at it though.

Oh, and it's always a pleasure to pay commissions that fund a christmas party I'm not invited to. Enjoy the pretzels.
 
Sorry "Keeps" - it happens to the best of us (we've been pretty lucky with Goldman)...

My boot campers mentionded to me that MCD had news/earnings etc., but I forgot to take if off my automated list (I've been doing opens manually for last couple of weeks)...anyway, left MCD in and it went a full $1.00 against me before fading back (tood 22 cent loss)....overall net zero.

Oh well, back to it tomorrow.


Don
 
3 Fills 1 short 2 longs all losers.

Lost .16/sh

Probably should have removed CTX and LEN due to TOL news. They made up the biggest loss.
 
Quote from VinMan:
Probably should have removed CTX and LEN due to TOL news. They made up the biggest loss.
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I have a little new function to cancell (not sending orders) all stocks in a sector or industry (based on Yahoo). Very helpfull. It would have trimmed all of them. As soon as a stock in a sector has a big news I cancell them all. Recently I hadded more stocks to my list so I dont care cancelling many and I can still play enough to get a decent fill qty.
Did not play today.
 
4 fills, 3 longs, 1 short, all winners. +0.27 average.
Screwed the last one by puting the order 15 cents away on the wrong side. Synthetic price improvement, lol.
 
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