Open buy/high sell

• 12 March 2008

• #1

MRC & Co

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Here is a weird one I have been thinking about for a while and applied today with good effect.

After the HUGE rise in the US overnight, I set some buy orders in some fundamentally safe stocks (at least I think so), at around 2% above yesterdays close.

I only got filled in half the orders, but then watched the market for a little peak in each stock price. I sold all 3 stocks for above cost price and ended up with a $500 return for today. Not an overly large amount of risk with a market set to JUMP and not an opportunity that will present itself too often (though more often in this current environment with its extreme volatility).

Thought I would try something completely different, worked at least for today.

Any thoughts or anyone tried something similar before?

Weird thread, but hey, out of the box!

 

• 12 March 2008

• #2

prawn_86

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Sometimes if the market gaps down a huge amount, you are beter going long on the top 200 stocks, as they tend to claw some back during the day.

Very risky though, i certainly wouldnt have the balls to do it.

 

• 12 March 2008

• #3

MRC & Co

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prawn_86 said:

Sometimes if the market gaps down a huge amount, you are beter going long on the top 200 stocks, as they tend to claw some back during the day.

Very risky though, i certainly wouldnt have the balls to do it.

Click to expand...

Yes, my cousin has traded professionally for a living for about 2 years I beleive (after about 15 years+ of trading).

He says this contrarian view was one of his favourite ways of trading intraday. Since then, he discovered VantagePoint and swears by it! Doesnt use much else anymore!

I wouldnt have the ballz for that either though. At least in a market expected to mimic the US around 3%, a 2% premium on close yesterday is not too high and I doubt there would be much downside if you get on a few stocks. Whilst setting tight stops.

Not a regular way to make money, but something different, afterall, we are all about predicting crowd behaviour!

 

• 12 March 2008

• #4

IFocus

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$500 may or may not be a good return depending on where you decided to set your stop.

Think through what your expected win / loss could be then R/R.

 

• 12 March 2008

• #5

MichaelD

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The DJIA has risen 4.5% only 6 times in the last 10 years not counting last night. The last time it happened was October 2002.

That's not a lot of data to work with.

 

• 12 March 2008

• #6

MRC & Co

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Absolutely not a lot of data to work with.

But any 2% rise, could set a 1% premium. Especially considering the ASX has fallen a lot more than US markets.

Definately R/R is very important.

Cant say its something I would do very often at all. Just something else to consider.

 

• 12 March 2008

• #7

peter2

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IMO you got very lucky. Most stocks opened high and went down most of the day. Toady was an ideal day for shorting on the open. Spend it quick before you lose it trying this again.

 

• 12 March 2008

• #8

Gundini

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Don't mind the idea,

I used to play set buys with CFD's, but found with them you nearly always bought them at the peak of the spike, and hence the potential profit margin was diminished. Also with CFD's you ended up buying all of your orders.

May be better with Full Shares, as you are more likely to get a fairer buy price, and those who are set too low will not trigger.

 

• 12 March 2008

• #9

chops_a_must

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prawn_86 said:

Sometimes if the market gaps down a huge amount, you are beter going long on the top 200 stocks, as they tend to claw some back during the day.

Very risky though, i certainly wouldnt have the balls to do it.

Click to expand...

It's actually quite safe I find. I do this a couple of times a week on the US futures these days.

Fade back to the nearest pivot point, and depending on the pattern and velocity, back to the previous close or daily pivot.

The most dangerous moves I find are medium level type gaps which run after open. But with good stops, you get out of them and can trade the other way/ reverse.

The statistics and probabilities are in your favour when it comes to gap fills. And even with half decent stop selection, you end up with a good overall R/R and consistent positive expectancy.

Cheers.