Trading Pre and the Open

R

ronb107

I only have the morning (till 11am) to day trade. Given this restriction, what are the best strategies to trade the pre-market and the Open?

One strategy I'm aware of would be fading the Gaps. If there is anyone successfully trading this time-frame, I would really appreciate some advise.

TIA, Ron
 
the morning is probably the most dangerous time of the day for novice traders. Personally, I would advise you against trading the first 30 minutes (atleast) wait for the overnight orders and the whole excitement of trading to settle down.

This will leave you from 10-11. Only an hour but if you have watched premkt and the open there are some potential setups that you can look for. You can always swing trade for 2-4 day trades which require minimal intra day supervision.

Fading the gap is a classic but rather risky to just blindly follow. Many times mkts gap for a reason (and continue in same direction) Keep your stops!!

Wish you the best.
 
It's extremely difficult to trade from 930-50. I ususally start my fades at that time. I almost never make money before 10. Premarket, the only thing I trade are warning stocks.
 
Should you trade the open? Depends on the following:

1. Do you trade naz or listed?
2. Are you good at cut your lost quick?
3. Do you read MM's/Specialist?
4. Do you have nice connection/data feed (I have this problem)?
5. Are you quick on mouse/keyboard (execution skills)?

Yeah, it is risky but there are lots of meat in the open, (the dumb money is at the open, right?)

I personally trade a lot on the open cuz I am impatient (workin on that one :)) fading gaps are rewarding but need practice,e.g. if you long, wait for confirmation - you can get in anytime, (I lost $300 long TLAB yesterday morning-I turned back and shorted it, got flat for the day.)but if you short, you need to get in quick - uptick rule (today, I shorted TMTA, took $800ish on 2 shorts)...

So there is no sure answer to that, but you need to find out your OWN style and practice, "you don't know until you bet".

good luck.
 
It is very low volatility now. The best time to trade is between 9:30 - 11:00. I actually try not to trade between 11 - 2 during the summer, of course that only happens 1/2 the time, the other 1/2 I grind out commissions and that is probably all. Sure it is more volatile on the opening, but we want volatility. Just be careful, cut losses quickly, and should be ok. Best of luck.
 
LoneHand

You mentioned that you shorted TMTA this morning. Can I ask who is your broker? I couldn't short it with anyone. Not even with my Redi broker, and SLK is supposed to have the biggest short list out there.
 
I appreciate all the responses.

Let's see if together we can work up some strategies that will turn a high risk period into a low risk, profitable period.

First, let's focus on the Ground Rules for all trades. Please feel free to criticize (or approve), suggest alternatives, etc.. Afterwards, we can list some strategies that will work with these Rules.

1. Trade only listed stocks (NYSE); this is a more orderly environment which should be easier to trade (it also makes it easier to learn how the Specialist trades the Open)

2. Trade stocks with an average daily volume of +200k; this ensures liquidity making slippage less of a problem (might also improve pre-market action)

3. Trade only stocks with an minimum daily range of 2pts; less volatility means less risk, which also means I can increase my position size (say from 100 to 200)

Below is a list of the 33 stocks that meet the above criteria.

Symbol;Company Name;
BBY;BEST BUY CO INC;
DNA;GENENTECH INC;
DGX;QUEST DIAGNOSTICS;
LH;LABORATORY CORP AMER HLDG(NEW;
IBM;INTL BUSINESS MACHINES;
MWD;MORGAN STANLEY DEAN WITTR & C;
MU;MICRON TECHNOLOGY;
GS;GOLDMAN SACHS GROUP INC;
MMM;MINNESOTA MIN'G/MFG;
LEH;LEHMAN BR HOLDINGS;
ADI;ANALOG DEVICES;
KKD;KRISPY KREME DOUGHNUTS INC;
LXK;LEXMARK INTL INC 'A';
AGN;ALLERGAN, INC;
LLL;L-3 COMMUNICATIONS HLDGS;
SPW;SPX CORP;
BRL;BARR LABORATORIES;
PGR;PROGRESSIVE CORP,OHIO;
VAR;VARIAN MEDICAL SYSTEMS INC;
CPN;CALPINE CORP;
DYN;DYNEGY INC NEW;
CLS;CELESTICA INC;
UTX;UNITED TECHNOLOGIES;
TER;TERADYNE INC;
WAT;WATERS CORP;
SFA;SCIENTIFIC-ATLANTA;
SGR;SHAW GROUP;
FLR;FLUOR CORPORATION (NEW);
IRF;INTL RECTIFIER;
CAM;COOPER CAMERON;
SII;SMITH INTL;
JEC;JACOBS ENGR GROUP;
CRA;APPLERA CORP - CELERA GENOMIC;

 
mjt,

I used MBTrading, when you short the stock that is fallin like a rock, you have to put a penny above the bid, then hope some jerk will hit you, isld should be your best bet cuz most islanders are green. if you see the bid on top of RT3 MM window lowered and the ask price is below your limit price, cancel it and re-enter the new price, Also, you can use arca.(inca sometimes is ok cuz lots of MM's try to bottom fishing or covering their shorts, only showing their partial size). Bottom line is, you need to be QUICK when shortin, like I said in the last post.

Today, symc will be interesting, I am planing long at the open, but I need confirmation.

Good luck.
 
10-11 am is the most profitable hour of my trading, anything making new hi/lo with small risk is a good trade, let it run to 11:15ish and if all goes well, you can go fishing for the day.
 
listed stock can sometimes take from a few minutes to more than 10 minutes to open (as the morning orders/imbalance is sorted out) just a heads up

this doesn't happen on Nasdaq/Amex
 
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