The Opening Orders Thread

1 long winner, +290 on 1000 shares

Enjoy the weekend, all. Taking my boys to a monster truck show tomorrow, so I may be deaf on Monday. I've never been to one, but I figure trucks smashing cars will be wildly entertaining to a 5 and 3 year old. With the Steelers out of the playoffs, I need some entertainment myself...
 
Quote from chiguy:

dow arb...worth about 70 over...opened 135 over...nyse basically opened the dow unchanged yesterday...futures were up abot 65 on the open...sell futures buy stock...
More...

How do you play that? With a basket against futures?
 
Quote from Arnie:

How do you play that? With a basket against futures?
More...

And how do you deal with NYSE not opening all at once?

I've never put much thought into computation of dow cash index. Is it calculated with yest. close for anything not open yet?
 
incredible information...for us novices considering this method..but I am a slow plain speak and think about stuff for a long time...I love trading and love to read about the journey :) well and to make real money someday:)

I took a month off from doing openings and when I started back in late August, I had a smaller list of stocks with bigger size. Just the thick, big caps that are the tried and true performers. I don't know if it was that or something that changed with the market, but I had 12 profitable weeks in a row.
 
Its generous of you to display a yearly review and comment.

Too bad no one here seems to want to ask the important questions. Perhaps that is why they TALK about it, but never seem to work it out for themselves.

So here's a couple of questions;

1. You mention that you experienced several $10,000 losing days. Could you characterize those days for us. What (if anything) did you do differently that caused the loss.

2. You mentioned that you put in opening orders for some 400 stocks. Do you enter that many as a rule? How do you handle exits?

3. What is the most important improvement you might make to smooth out your returns.

Thanks
Steve
 
Quote from steve46:

1. You mention that you experienced several $10,000 losing days. Could you characterize those days for us. What (if anything) did you do differently that caused the loss.
More...

The first was Jan 26. I had 3 longs and 9 shorts and out of that got one winner and one scratch. The market was gapping up big that morning and it looks like it just ran higher from the start. I don't have any notes about anything unusual that day. I imagine I was trying to be patent and scale out of the losers while trying to hold the longs and hoping for the market to reverse somewhat and it never did. The ol' gap and go. Not that common and if you're positioned wrong for it, it'll hurt, not much you can do about it.

The second was July 19th and I remember that day because I got smoked in every account and every strategy and had my worst day ever by a factor of 2. All the turmoil of the Isreal/Lebanon crisis had knocked the market down and there was pre-market news that had the spoos gapping up (probably some economic number). I had 2 longs and 12 shorts and the market just rocketed higher from the bell. No chance at all to get out of that ok and I tend to scale out of losers trying to give them time, so that made it worse.

I didn't do anything different on those days and would probably trade things the same today. I could bail on the losers quicker, that's usually the result of the postmortem review on days like that.


2. You mentioned that you put in opening orders for some 400 stocks. Do you enter that many as a rule? How do you handle exits?
More...

I trade several variations of opening orders. That means multiple lists of stocks in several accounts all with different rules and exits. Some of it is automated, some of it is mechanical (numbers spit out by a spreadsheet) and some of it is totally discretionary.

3. What is the most important improvement you might make to smooth out your returns.
More...

Going to a smaller list of stocks and removing the scary ones that tend to blow up in your face once in a while made a big difference.
 
Very interesting thread.

Corey,

What % of your total equity do you risk per trade? It seems like you hold multiple positions at a time with the OO strategy. I would also like to know what is your average max drawdown during a given year and what % return do you aim for in a given year.

thanks

Qi
 
I do not risk a set amount per trade. In fact, my risk is open ended because I do not know how many positions I will have and I do not use stops. I just trade what I get and let the market tell me when I'm wrong.

I determine my position size based on my best estimate of what a "really bad day" would equate to in dollar terms. This is just based on my experience and 5 years of detailed statistics.

Because this is such a capital intensive strategy, it is difficult to trade in a retail account. In my opinion percentage returns in a prop account are meaningless because of the amount of leverage that is in use at times. I only think in dollar terms, both for what I earn and what I risk. These dollar terms are only relative to how much risk I am comfortable taking and how much of a cushion I have with my account equity.

The way I trade this strategy, it's been very consistent for me. You can get an idea of my max drawdown from the equity curve I posted earlier in this thread. 2006 was the least profitable and most inconsistent this strategy has been for me in 5 years. I basically flatlined for the first 2/3rds of the year.

The point that I always emphasize about opening orders is that it is not really a "strategy" per se. A trading strategy involves other elements like risk management and exits. The discussions in this forum revolve around the "getting in", participating in the opening print. After you are in though, you are left to your own devices. The street is littered with stories of guys who have tried this strategy and lost money or lost their patience. It's not for everyone. It is just not going to be a good match for lots of people's trading personalities.
You still have to know how to trade.
 
You must log in or register to reply here.
Back
Top