Trading Pre and the Open

Rtharp:

I just feel he should start out with something slower and easier (MO, DIS are good stocks). Anyway he will not be allowed to trade the following stocks at WLDC as a new trader anyway (list updates every Monday):

CRA, DIA, DOX, EMC, GS, IBM, IRF, LEH, LH, MMM, MU, MWD
QQQ, SPW, SPY, WLP and all HOLDERS(BBH, HHH, SWH, etc.)
 
Praetorian, I don't recall mentioning limited funds as an issue (it is not). If IBM is prone to bad fills, then I'll remove it from the list; it is on the list because rtharp had recommended it (however, I would like to know what strategy, in general, rtharp's friend employs).

With regard to the NO STOP strategy, you actually have a 3 pt mental stop (I think). I also believe this strategy applies to a specific specialist (correct me if I'm wrong). If so, whom?

rtharp, if 80% of your daily winnings occur during the first 40 minutes, would you be so kind (I'm being sincere, here) as to share with us your morning strategy?

Hitman, tell me what to prune from this list (let's remove the restricted stocks) and add back the top ten on your recommended list.

MktSkills brings up a valid point (which was also mentioned by Praetorian): trade stocks with moderate volatility (under a 3 pt avg daily range). Our list of stocks should be restricted to slow moving issues (things move fast enough in the morning; slower issues will provide easier trades).

Your posts are great. I really appreciate everyone's input.

Thanks, Ron

 
I have posted my strategies for entries on this board before. There are entire threads about my trading styles.


I trade overbought /oversold.


I look for charts that have had a volatility increase in a direction with hopefully little retracement. The more days in the same direction the better. There is a thread called Great New Pattern on this board. Well in this market about 85% of my trading is done with this strategy flipped. I tend to find heavily overbought stocks and short them on the open when they go below the previous day's close. My stop is sometimes a point, or the previous close depending on what is closer. I also have bullets on these stocks I'm shorting FYI.


I either lose a point (or whatever my stop is) or the market just tanks and I go along for the ride. When I'm right I make a bundle, when I'm wrong I trade again tomorrow on another high probability setup. I short the days the daily trend is down and play the long side on up days. I will usually close out 80% of the position within an hour.


As my message board is slowing down. I am reviving it by posting my daily watchlist there nightly.

the web address is.

http://communities.msn.com/Rtharpsl..._Message=668&LastModified=4675327568701246469

The IBM trader I can't even begin to explain how he makes money on it. I really don't understand what he does. It works for him though. I can't trade it that well either.

rtharp
 
In all honesty, I have little experience with IBM. I think that I am up a few k net from maybe a half dozen scalps against it. It just isn't my type of stock. If you can work it, you have my respect. There really isn't any particular stock for a person. Just learn a stock. Once you know it well, you'll bank no matter what. As for how I trade, either come to our yahoo room and watch in real time, or read my threads. As for dis/mo, those are just gut feeling stocks. I get a gut feel, and buy/sell based on it. I'm almost always right just cause i've watched it so much.
 
Praetorian, RTharp, Hitman:

I've skimmed a good portion of the two threads 'Great New Pattern' (GNP) and I find it appealing for a number of reasons:

1) It fits my need for a Morning play, which means I'm out of the position before 11am.

2) It is SIMPLE. This is a key advantage, and minimizes the risk of distorting data (no indicators) or improper execution.

3) It is rooted in fundamental market behavior, greed and panic. This means this pattern is good in any Market environment, and will be with us for a long time.

4) It provides a high Reward/Risk ratio. Stops are placed just below the Opening (or your entry), and the upside is easily 1/2 pt (and generally 1 or more points).

Simply put, this is what I would term the "rubber band" pattern. Due to some news specific to the stock or its Sector, there is extraordinary volume stretching the price of the stock to an extreme. The next day (or two), the price snaps back to a normal position, which typically occurs in the Morning (before it continues its natural direction).

I have simplified the Selection process to the following criteria (I'm sure this can be improved)...

o the one day price change is greater than $2
o the Volume change is greater than 250%
o the Avg 6 month Volume is greater than 50,000
o and today's Volume is the highest in 2 months

I will continue reading the two threads and reviewing the charts. They are invaluable, and I deeply appreciate the efforts of everyone who contributed to them.

RTharp, you might want to consider storing the two GNP threads on your site to ensure not only its safety but broader exposure. (Just a thought, if EliteTrader has no issues with this).

RTharp, your strategy is a modified version of the GNP model (it is likely that you've developed this strategy long before the GNP posts). I am reviewing your threads to improve my technique, especially with regard to confirmation.

BTW, strategies (as you know) are not just about the entry. What do you consider when placing your stop-loss and target? And what's considered when you want to add to your position?

If I'm getting too intrusive, just let me know and I'll back off. I do appreciate all your help.

Hitman, the list you posted are restricted stocks? If so, select the top 5 stocks that you would recommend. Also, WLDC does not allow shorting for newbies (or just bullets)? Why? And, is this negotiable?

Thanks for your continued feedback.

Ron


 
Ron:

Yes shorting is allowed but no bullets (minimum 1500 shares and if you put up a bullet that big and trade 100-200-300 shares you will lose money guaranteed because of commission alone).

That said, if you can befriend a senior trader he may be willing to share bullets with you . . . or if you work with another newbie you two can split a bullet cost since none of you will be able to do 1500 shares off the bat . . . The software allows you to easily transfer a portion of the bullet to any trader of your choice.

I really don't have a top 5 but I would recommend one or two stock per sector off the list I gave you, then just watch them to death . . . A good newbie line-up would be:

1) EOG (XNG)

2) NSM, AMD (SOX)

3) HP, NE, WFT (OSX)

4) COF, PVN, STT (BKX)

5) AGE, BSC (XBD)

6) EMN, ROH, PPG (CEX)

None of those stocks are very tough, and they move enough to make money, and they are literally glued to their indexes . . . You can pick any 5 and will do fine . . . Most importantly, none of those are tier 1's so you are NOT exposed at the front line off the open if you took the wrong direction.
 
The 3 stops are:
The first 10 min bar (either way)
After that, below the high/low of the 10 minute bar in the opposite direction of the first move.
Finally, after the 25-45 min consolidation after the open, the main morning move. (retracement of this move usually starts around 11:15-11:45 as people take profits before the lunch hour shake.
 
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