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Opening Orders - 2008
- Thread starter Don Bright
- Start date
Quote from Dosjots:
Question â from what I see, the âbasic opening strategyâ for a non-newbie seems to average ~.10 - .12 cents daily. Sometimes more, sometimes less. But over several months/quarters, that roughly appears to be the daily average. I also say âbasic strategyâ since I know several have developed their own person rules and average more. Is that a reasonable approximation?
Thanks-
Not really. You can go for long periods of time and the entire year losing money. It's like anything else, the 5% or so who have tried this strategy and are profitable, still use it. Remember, there are the other 95% who tried it and stopped. Those that have not been profitable or feel that this strategy occupies too much of their time for the reward, don't use it.
Are there people who can grind out some money doing it? Of course.
It's like any other small business in america. A few succeed....the majority don't.
If you are able to discern a clear direction the market will take after the open, beforehand, does that mean you are taking a futures position before the open too? If not, why?
Quote from trader#21:
Placed 5 orders, got filled(long) in GM and BIIB both big winners
PS: I take the open prints only on days when futures/particular stock indicate a clear direction after open.
Quote from Dosjots:
Question â from what I see, the âbasic opening strategyâ for a non-newbie seems to average ~.10 - .12 cents daily. Sometimes more, sometimes less. But over several months/quarters, that roughly appears to be the daily average. I also say âbasic strategyâ since I know several have developed their own person rules and average more. Is that a reasonable approximation?
Thanks-
Talking in pure cents is meaningless, unless you only trade stocks with the same price range, share size and volatility, and those metrics don't change. A more accurate description would be cents per share traded. If you can pull 1-2 cents profit for every share traded over a long period of time, you're doing pretty good.
If you can keep that profit margin and scale up the size to several million shares per month, soon you're talking about real money.
I agree with both lescor and Donkee.Quote from Dosjots:
Question â from what I see, the âbasic opening strategyâ for a non-newbie seems to average ~.10 - .12 cents daily. Sometimes more, sometimes less. But over several months/quarters, that roughly appears to be the daily average. I also say âbasic strategyâ since I know several have developed their own person rules and average more. Is that a reasonable approximation?
If you get an average of 3 fills per day, 2-10 cents on average, 70% winning rate you can get close to 10 cents per day. But it really depends what you do, which stocks you trade...
I average 0.05-0.07 per share 3 fills per day.
There is no free lunch here. It's not that easy and it's time consuming if you take the required time to read the news.
Quote from total_keops:
BIIB is a Nasdaq stock, is there a open auction on Nasdaq?
there isn't open auction on nasdaq stocks. I need to talk how I choose a postion:
1. A stock is at a imp level. (suppose it goes to a imp resistance with yesterday's up day, but today the futures indicate a weak open, so i'll consider it lucky to get a short near that level.)
2. The market seem to take a clear direction just after open... I take a position in QQQQ
an open auction helps gets the best price for trading stocks as in first case. But if there isn't, why miss the opportunity? there was almost a 2$ clean move in case of BIIB. both GM and BIIB were good candidates for mean reversion. Some days earlier got a very good trade in DRYS .
Quote from lescor:
If you are able to discern a clear direction the market will take after the open, beforehand, does that mean you are taking a futures position before the open too? If not, why?
See there are always two possibilities... 1. markets indicate open with a gap 2. markets indicate a flat open.
For the latter case I usually dont take positions at open. If DOW opens with a gap of something like 100 points there can be two possibilities... it continues in the direction of gap after first few minutes or it retraces some amount before indicating a trend for the rest of day(if at all it does). The latter happens more often. Somewhere mentioned in previous post that take a position in QQQQ 5-10 minutes before market open. I find it better because to take premarket position to avoid slippage which come as wild swings just after open. The target is usually from 20-30 cents with a stop under 10 cents.
Well, trade differently thats why dont post my P/L in terms of cents either. Actually I doubt whether participate in thread or observe silently.
I am a newbie at this. The one thing that concerns me about this strategy is the money management aspect. Because of the nature of the openings, every once in a while you could end up with a really big loss. Mechanical stops donât work well because of the volatility. One disaster scenario is you get 3 or 4 fills all buys on a down day opening expecting your exit limit orders to get filled on the bounce, but none of them get filled and the market keeps going down. You can stop out taking a big loss or wait a half hour to see if the market reverses in which case your losses could be even greater. What to do? For traders that have been doing this for a long time, have you encountered this large loss day?
FV = 6.29. 17 Orders, Buy and Sell, Buy envelope 2%, Sell Envelope 1%, Got only 1 fill - bought T for 15 cents. I may have been too conservative on the envelopes. Had 500 shares so made $75.