[BIGINJAPAN]

(03-17-2013 11:25 PM)horn Wrote:  

(03-17-2013 01:13 AM)gsinplaya Wrote:  

(03-16-2013 03:50 PM)horn Wrote:  

No retail investor should ever deal in options. You don't need to, you get raped on the b-a spread, and there's tiny liquidity in almost every case. If you want to buy a protective put on a locked-in stock position you can't sell that's really the only solid reason to get involved in the options market. over 95% of the profits go to the market-makers/pros, which has been shown by every study on the subject.

go have a look at an option chain at an op-ex date and you will see that this "95% of options expire worthless" quote is completely false. I assume that is what you meant when you said all the $$$ go to the market-makers/pros.

I'm sorry you are intellectually challenged, but that's not what I meant. What I meant is exactly what I said. Notice the phrase 'expire worthless' does not appear anywhere in my post.

I have been an options professional: structuring, marketing, trading and sales for much of the past 15+ years, both on the buy and sell side, having started in IR swaps, caps and floors.

I am not a newb keyboard jockey like those that post in anonymous forums talking about how great they are and how much money they make trading vol against the professionals and giving horrid advice like 'Sell covered calls ZOMG free money!11!11!!!

Quote:

i trade options on a basket of around 30 - 40 stocks year round....never had problems with liquidity on options and only really have issues with the bid/ask spread on 1 or 2 (e.g. pcln,crm). no idea what options you are looking at.

You're trading 1-2 contracts and you're ignorant enough to both give advice and lecture people who trade more in a week than you'll trade in a lifetime.

The mod had the right idea when he talked about deleting/blocking those who brag about how well they do in the markets. If any of you could systematically beat the markets, I'd show up with 8-figs of USD for you to trade. But you can't. You've been Fooled by Randomness.

Quote:

I've seen many traders make very good and consistent income with covered calls but not in the traditional way most people look at covered calls.

No, you haven't. Unless they are market-makers or Quants working for Simons, Alan Howard or Dave Shaw. I invest with these guys, and you don't beat them at options trading. [Not Simons as he's closed to outside money now].

Quote:

not here to start an argument but I dont believe the information you are presenting is accurate.

You are too ignorant to know the difference. But I'm glad your Fin 101 textbook and wiki allowed you to re-generalize my example from VIX to imp vol and act like you knew something more than a 15-minute search on the Net.

But, you can always prove me wrong, post your audited trading records for the past 5 years, you can do a password-locked file and I will happily apologize.

If you can systematically create alpha via an options-trading strategy that isn't based on beta, you will attract literally $hundreds of millions of dollars in funding. At 1.5% and 20% you can retire to your own private island with supermodels galore by 2018.

Why don't you show us your 8 figures that you have to invest ?

[Fenix]

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:

   

My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

[gsinplaya]

(03-19-2013 09:04 PM)Fenix Wrote:  

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:



My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

some big winners % wise there...nice...seems like you are doing a good job in letting your winners ride.

I'm interested to hear about what technical rules you use to enter a stock?

[T and A Man]

How is that return calculated, it just looks share weighted.

it also doesn't account for transaction frictions or tax.

[Fenix]

(03-19-2013 11:38 PM)gsinplaya Wrote:  

(03-19-2013 09:04 PM)Fenix Wrote:  

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:



My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

some big winners % wise there...nice...seems like you are doing a good job in letting your winners ride.

I'm interested to hear about what technical rules you use to enter a stock?

It varies considerably, from simply looking at a mountain style chart 1-5 yrs back and buying dips in a trending channel to trying to get the price down to a gnat's ass using a 1 minute candlesticks chart and a volume indicator.

[Fenix]

(03-20-2013 03:42 AM)T and A Man Wrote:  

How is that return calculated, it just looks share weighted.

it also doesn't account for transaction frictions or tax.

its the profit / buy price. if i bought the stock at $30 and sold it at $45 then its 15/30 or 50% gross profit. i thought this was the standard method to do it.

at the small number of shares that i trade, including the commission fee of $14-18 would be significant. i do account for it in columns J & K for the net profit/loss.

[Fenix]

(03-19-2013 11:38 PM)gsinplaya Wrote:  

(03-19-2013 09:04 PM)Fenix Wrote:  

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:



My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

some big winners % wise there...nice...seems like you are doing a good job in letting your winners ride.

I'm interested to hear about what technical rules you use to enter a stock?

i think i'm doing a lousy job with my winners. for example, i bought SODA at several entries between 30-33. i cashed some positions out at 41-43 but kept 20 shares. price went all the way up to 75. thought about selling when it was around 73 but let it ride instead. crashed back down to the low 30s. now its been dancing around 50.

another is FNMA - bought it at .32 and sold at .70 yesterday. today it shot up to 1.08

[T and A Man]

(03-20-2013 11:11 PM)Fenix Wrote:  

(03-20-2013 03:42 AM)T and A Man Wrote:  

How is that return calculated, it just looks share weighted.

it also doesn't account for transaction frictions or tax.

its the profit / buy price. if i bought the stock at $30 and sold it at $45 then its 15/30 or 50% gross profit. i thought this was the standard method to do it.

at the small number of shares that i trade, including the commission fee of $14-18 would be significant. i do account for it in columns J & K for the net profit/loss.

I meant the 78.57%.

It looks to be a simlpe arithmetic share weighted performce, not value weighted.

One that stands out is your 2nd CSR, a profit of $22, or 20.37%... but eliminate the transaction friction of $7 (do you also pay $7 on the way in?) and you real profit is significantly smaller.

[gsinplaya]

(03-20-2013 11:32 PM)Fenix Wrote:  

(03-19-2013 11:38 PM)gsinplaya Wrote:  

(03-19-2013 09:04 PM)Fenix Wrote:  

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:



My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

some big winners % wise there...nice...seems like you are doing a good job in letting your winners ride.

I'm interested to hear about what technical rules you use to enter a stock?

i think i'm doing a lousy job with my winners. for example, i bought SODA at several entries between 30-33. i cashed some positions out at 41-43 but kept 20 shares. price went all the way up to 75. thought about selling when it was around 73 but let it ride instead. crashed back down to the low 30s. now its been dancing around 50.

another is FNMA - bought it at .32 and sold at .70 yesterday. today it shot up to 1.08

i guess it depends on how well you are managing risk on trades that don't go your way...if your losses are small compared to the average % gains you make on winning trades you should be able to take good profits out of the market.

that FNMA would have been a brilliant short today when it traded back down through yday's hod...textbook outside reversal

[Fenix]

(03-21-2013 12:28 AM)T and A Man Wrote:  

(03-20-2013 11:11 PM)Fenix Wrote:  

(03-20-2013 03:42 AM)T and A Man Wrote:  

How is that return calculated, it just looks share weighted.

it also doesn't account for transaction frictions or tax.

its the profit / buy price. if i bought the stock at $30 and sold it at $45 then its 15/30 or 50% gross profit. i thought this was the standard method to do it.

at the small number of shares that i trade, including the commission fee of $14-18 would be significant. i do account for it in columns J & K for the net profit/loss.

I meant the 78.57%.

It looks to be a simlpe arithmetic share weighted performce, not value weighted.

One that stands out is your 2nd CSR, a profit of $22, or 20.37%... but eliminate the transaction friction of $7 (do you also pay $7 on the way in?) and you real profit is significantly smaller.

nah, that's just a simple averaging of the column's values.

the point of this experiment for me was to see how i would do in real market conditions, a step up from my paper trading. i'm not a professional money manager or trader so i'm not worried about trnx cost percentages, etc.

CSR was taken private by it's owner in a buyout so no trnx fee on the sell.

[Fenix]

(03-21-2013 01:49 PM)gsinplaya Wrote:  

(03-20-2013 11:32 PM)Fenix Wrote:  

(03-19-2013 11:38 PM)gsinplaya Wrote:  

(03-19-2013 09:04 PM)Fenix Wrote:  

I used to work in the options side of the Pacific Exchange. Was on the exchange staff, not for a trading firm. The trading floor/pits was a hell of a scene. Those guys were making money hand over fist. One guy died of a heart attack right in the pit.

Interestingly enough, I wasn't attracted to trading at that time. I did look into trading options several years ago as a way of making money from home/anywhere. Bought a stack of books on options trading that I mostly did not read. The ones that I did had some impressive info, including a couple of Jack Schwager's - Stock Market Wizards and New Market Wizards. A couple of years ago I decided to do this mobile/travel lifestyle. Moved out of my apt and put everything in storage. All these trading books were too heavy & bulky so I threw them away.

However, I decided to dip my toe into trading. Options was too complicated for me, so I got into position trading. It felt like playing roulette, placing bets on certain squares, albeit with some research and light technical analysis. I have both wins & losses. My wins I cash out if they are making 20% or more. I let my losses ride.

I wish I could trade options so I can play the move down, at least cover a potential loss.

Here are the wins that I've cashed out:



My losses include ATP, WATG, TRGL and EEE - which was also my biggest gainer at 320% and 420%.

some big winners % wise there...nice...seems like you are doing a good job in letting your winners ride.

I'm interested to hear about what technical rules you use to enter a stock?

i think i'm doing a lousy job with my winners. for example, i bought SODA at several entries between 30-33. i cashed some positions out at 41-43 but kept 20 shares. price went all the way up to 75. thought about selling when it was around 73 but let it ride instead. crashed back down to the low 30s. now its been dancing around 50.

another is FNMA - bought it at .32 and sold at .70 yesterday. today it shot up to 1.08

i guess it depends on how well you are managing risk on trades that don't go your way...if your losses are small compared to the average % gains you make on winning trades you should be able to take good profits out of the market.

that FNMA would have been a brilliant short today when it traded back down through yday's hod...textbook outside reversal

FNMA was crazy today. Opened around 1.08, went all the way up to 1.46 then crashed all the way down to .55 - I bought some at .60 - last I checked it's now up at .85 for a 41% unrealized gain.

I don't know how to short in Scottrade or Schwab but it's probably best for me not to get into shorts in a bullish market.

[gsinplaya]

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

[Fenix]

(03-21-2013 02:52 PM)gsinplaya Wrote:  

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

yea, maybe "volatile" would have been a better word to describe FNMA today.

If you can consistently make money in that short of a timeframe, perhaps you can consider writing the "40 Minute Workweek". I can probably do this with my style of trading - spend 30 minutes researching the company then 10 minutes or less placing the trade. Do one stock per week..

If you were to short FNMA today, what would you have used as technical confirmation that it was an outside reversal? Here's today's 1 minute candlestick and volume chart - it looks like it blew thru yesterday's high (and close) of 1.08 like a hot knife thru butter. Didn't even hesitate one bit. Huge volume (close to 9 million) when it bottomed at .55

   

[gsinplaya]

(03-21-2013 06:55 PM)Fenix Wrote:  

(03-21-2013 02:52 PM)gsinplaya Wrote:  

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

yea, maybe "volatile" would have been a better word to describe FNMA today.

If you can consistently make money in that short of a timeframe, perhaps you can consider writing the "40 Minute Workweek". I can probably do this with my style of trading - spend 30 minutes researching the company then 10 minutes or less placing the trade. Do one stock per week..

If you were to short FNMA today, what would you have used as technical confirmation that it was an outside reversal? Here's today's 1 minute candlestick and volume chart - it looks like it blew thru yesterday's high (and close) of 1.08 like a hot knife thru butter. Didn't even hesitate one bit. Huge volume (close to 9 million) when it bottomed at .55

ok this trade is one of my favourites...and works really well on stocks which are controlled heavily by HFT's

basically you look for a stock which is overextended to the upside or downside for a reversal pattern (outside reversal)

by overextended i mean far away from the key "fast" moving averages ...8ema or 5sma....outside of the bollinger bands....and overbought/oversold

In the FNMA example in the morning you look for aggressive buying which suckers in longs who are late to the trade and trying to chase. You want to see the stock price exceed the previous days high.

Often (not always) you will find stocks that are prone for reversal will put in a high at 10am or 1030am and then reverse from there.

The trigger for the trade is when it comes back down through the previous day HOD and you place your stop at the current day HOD.

e.g. FNMA Trigger - 1.08 (stop @ 1.47)

Let me go through another example.

Yesterday HPQ put in an outside day which signalled a reversal. Keep in mind these reversals can be short or significant...its hard to tell.

So HPQ yesterday traded through the previous day HOD and then reversed back down through it.

HPQ Short Trigger - 23.14 (stop @ 23.58)

2 of my best swing trades in the last few months have been with this reversal strategy.

These 2 trades were -

XIV Long (31 Dec) - entry @ 15.60 (stop @ 14.78)
- exit @ 22.03

HLF Long (24 Dec) - entry @ 26.03 (stop @ 24.24)
- exit @ 41.50

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

That make sense?

[Fenix]

(03-21-2013 09:00 PM)gsinplaya Wrote:  

(03-21-2013 06:55 PM)Fenix Wrote:  

(03-21-2013 02:52 PM)gsinplaya Wrote:  

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

yea, maybe "volatile" would have been a better word to describe FNMA today.

If you can consistently make money in that short of a timeframe, perhaps you can consider writing the "40 Minute Workweek". I can probably do this with my style of trading - spend 30 minutes researching the company then 10 minutes or less placing the trade. Do one stock per week..

If you were to short FNMA today, what would you have used as technical confirmation that it was an outside reversal? Here's today's 1 minute candlestick and volume chart - it looks like it blew thru yesterday's high (and close) of 1.08 like a hot knife thru butter. Didn't even hesitate one bit. Huge volume (close to 9 million) when it bottomed at .55

ok this trade is one of my favourites...and works really well on stocks which are controlled heavily by HFT's

basically you look for a stock which is overextended to the upside or downside for a reversal pattern (outside reversal)

by overextended i mean far away from the key "fast" moving averages ...8ema or 5sma....outside of the bollinger bands....and overbought/oversold

In the FNMA example in the morning you look for aggressive buying which suckers in longs who are late to the trade and trying to chase. You want to see the stock price exceed the previous days high.

Often (not always) you will find stocks that are prone for reversal will put in a high at 10am or 1030am and then reverse from there.

The trigger for the trade is when it comes back down through the previous day HOD and you place your stop at the current day HOD.

e.g. FNMA Trigger - 1.08 (stop @ 1.47)

Let me go through another example.

Yesterday HPQ put in an outside day which signalled a reversal. Keep in mind these reversals can be short or significant...its hard to tell.

So HPQ yesterday traded through the previous day HOD and then reversed back down through it.

HPQ Short Trigger - 23.14 (stop @ 23.58)

2 of my best swing trades in the last few months have been with this reversal strategy.

These 2 trades were -

XIV Long (31 Dec) - entry @ 15.60 (stop @ 14.78)
- exit @ 22.03

HLF Long (24 Dec) - entry @ 26.03 (stop @ 24.24)
- exit @ 41.50

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

That make sense?

Excellent explanation, thank you. Using candlesticks, my trigger would have been at 1.25-1.26. Would I have had the guts to place the trade..can't truly say since I don't normally short.

Quote:

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

This answers my next question. I'm attaching a 15 minute chart of FNMA for the past 5 trading days and it's definitely zig-zagging thru the LRT.

   

If this is the case, then I should put in a limit order to sell my position at .60 when it reaches 1.05 or so, perhaps 1.08 since that was yesterday's close.

However, if I did this it I wouldn't be allowing my winners to ride. For me, if I want to cash out, I wait until the price catches a breather and hesitates and is confirmed with heavy volume.

Do you know if the HFT/Algo systems keep track of every market position in a particular stock? Meaning, the algo won't let the price go up more than a certain percentage from the lowest held position by any player? This would prevent its competitors from letting their positions ride.

[gsinplaya]

(03-22-2013 12:20 AM)Fenix Wrote:  

(03-21-2013 09:00 PM)gsinplaya Wrote:  

(03-21-2013 06:55 PM)Fenix Wrote:  

(03-21-2013 02:52 PM)gsinplaya Wrote:  

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

yea, maybe "volatile" would have been a better word to describe FNMA today.

If you can consistently make money in that short of a timeframe, perhaps you can consider writing the "40 Minute Workweek". I can probably do this with my style of trading - spend 30 minutes researching the company then 10 minutes or less placing the trade. Do one stock per week..

If you were to short FNMA today, what would you have used as technical confirmation that it was an outside reversal? Here's today's 1 minute candlestick and volume chart - it looks like it blew thru yesterday's high (and close) of 1.08 like a hot knife thru butter. Didn't even hesitate one bit. Huge volume (close to 9 million) when it bottomed at .55

ok this trade is one of my favourites...and works really well on stocks which are controlled heavily by HFT's

basically you look for a stock which is overextended to the upside or downside for a reversal pattern (outside reversal)

by overextended i mean far away from the key "fast" moving averages ...8ema or 5sma....outside of the bollinger bands....and overbought/oversold

In the FNMA example in the morning you look for aggressive buying which suckers in longs who are late to the trade and trying to chase. You want to see the stock price exceed the previous days high.

Often (not always) you will find stocks that are prone for reversal will put in a high at 10am or 1030am and then reverse from there.

The trigger for the trade is when it comes back down through the previous day HOD and you place your stop at the current day HOD.

e.g. FNMA Trigger - 1.08 (stop @ 1.47)

Let me go through another example.

Yesterday HPQ put in an outside day which signalled a reversal. Keep in mind these reversals can be short or significant...its hard to tell.

So HPQ yesterday traded through the previous day HOD and then reversed back down through it.

HPQ Short Trigger - 23.14 (stop @ 23.58)

2 of my best swing trades in the last few months have been with this reversal strategy.

These 2 trades were -

XIV Long (31 Dec) - entry @ 15.60 (stop @ 14.78)
- exit @ 22.03

HLF Long (24 Dec) - entry @ 26.03 (stop @ 24.24)
- exit @ 41.50

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

That make sense?

Excellent explanation, thank you. Using candlesticks, my trigger would have been at 1.25-1.26. Would I have had the guts to place the trade..can't truly say since I don't normally short.

Quote:

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

This answers my next question. I'm attaching a 15 minute chart of FNMA for the past 5 trading days and it's definitely zig-zagging thru the LRT.



If this is the case, then I should put in a limit order to sell my position at .60 when it reaches 1.05 or so, perhaps 1.08 since that was yesterday's close.

However, if I did this it I wouldn't be allowing my winners to ride. For me, if I want to cash out, I wait until the price catches a breather and hesitates and is confirmed with heavy volume.

Do you know if the HFT/Algo systems keep track of every market position in a particular stock? Meaning, the algo won't let the price go up more than a certain percentage from the lowest held position by any player? This would prevent its competitors from letting their positions ride.

I usually view the LRT on a 9mth Daily chart rather than the timeframe you mentioned.

It's not something I would normally use for momo plays like this....but I'll be interested to see if it does work on that timeframe you mentioned.

A trick I use when I am trading on a shorter timeframe (imparticular stocks with heavy HFT volume) is to watch intraday for a roundprint e.g. 145.00

These numbers are no coincidence...it is usually indicative of the bots running the stock prices up to these prices before they fade the move or just burn option premium

This can help to identify intraday tops or bottoms and sometimes major tops

Today I was looking at OPEN (roundprint intraday @ 62.00)

Check out GOOG all time high (844.00)
AAPL 12mth Low (419.00)
SRPT 12mth High (45.00)

This isn't a fluke it happens everyday on alot of stocks. You also see it a huge amount in After hours trading on stocks which have just reported earnings. This is where alot of the HFT's make $ as its quick and volatile trading.

Not sure it will help you with your trading style and the type of stocks you trade..but its worth keeping an eye on.

I guess that somewhat answers your question about HFT putting a ceiling on how high stocks can go ....I dont have the answer for the specific questions you asked though. I have done a little bit of work tracking range patterns on the SPX but its not something that is really going to help you.

[Fenix]

(03-22-2013 01:20 AM)gsinplaya Wrote:  

(03-22-2013 12:20 AM)Fenix Wrote:  

(03-21-2013 09:00 PM)gsinplaya Wrote:  

(03-21-2013 06:55 PM)Fenix Wrote:  

(03-21-2013 02:52 PM)gsinplaya Wrote:  

yeah fair enough...i think this market is providing both good longs and shorts in specific names but my style is very different to yours.

I'm a short term trader of options.

For instance today i traded AAPL calls, and GS Puts...nice day.

I have had to shorten my timeframe on trades as the market seems vulnerable here...those 2 trades today I was in and out in under 10 minutes.

yea, maybe "volatile" would have been a better word to describe FNMA today.

If you can consistently make money in that short of a timeframe, perhaps you can consider writing the "40 Minute Workweek". I can probably do this with my style of trading - spend 30 minutes researching the company then 10 minutes or less placing the trade. Do one stock per week..

If you were to short FNMA today, what would you have used as technical confirmation that it was an outside reversal? Here's today's 1 minute candlestick and volume chart - it looks like it blew thru yesterday's high (and close) of 1.08 like a hot knife thru butter. Didn't even hesitate one bit. Huge volume (close to 9 million) when it bottomed at .55

ok this trade is one of my favourites...and works really well on stocks which are controlled heavily by HFT's

basically you look for a stock which is overextended to the upside or downside for a reversal pattern (outside reversal)

by overextended i mean far away from the key "fast" moving averages ...8ema or 5sma....outside of the bollinger bands....and overbought/oversold

In the FNMA example in the morning you look for aggressive buying which suckers in longs who are late to the trade and trying to chase. You want to see the stock price exceed the previous days high.

Often (not always) you will find stocks that are prone for reversal will put in a high at 10am or 1030am and then reverse from there.

The trigger for the trade is when it comes back down through the previous day HOD and you place your stop at the current day HOD.

e.g. FNMA Trigger - 1.08 (stop @ 1.47)

Let me go through another example.

Yesterday HPQ put in an outside day which signalled a reversal. Keep in mind these reversals can be short or significant...its hard to tell.

So HPQ yesterday traded through the previous day HOD and then reversed back down through it.

HPQ Short Trigger - 23.14 (stop @ 23.58)

2 of my best swing trades in the last few months have been with this reversal strategy.

These 2 trades were -

XIV Long (31 Dec) - entry @ 15.60 (stop @ 14.78)
- exit @ 22.03

HLF Long (24 Dec) - entry @ 26.03 (stop @ 24.24)
- exit @ 41.50

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

That make sense?

Excellent explanation, thank you. Using candlesticks, my trigger would have been at 1.25-1.26. Would I have had the guts to place the trade..can't truly say since I don't normally short.

Quote:

For working out an exit if it is a swing I will often use the Linear Regression Trendline (LRT) as the target for the swing. It's a really powerful tool as price tends to gravitate towards it.

This answers my next question. I'm attaching a 15 minute chart of FNMA for the past 5 trading days and it's definitely zig-zagging thru the LRT.



If this is the case, then I should put in a limit order to sell my position at .60 when it reaches 1.05 or so, perhaps 1.08 since that was yesterday's close.

However, if I did this it I wouldn't be allowing my winners to ride. For me, if I want to cash out, I wait until the price catches a breather and hesitates and is confirmed with heavy volume.

Do you know if the HFT/Algo systems keep track of every market position in a particular stock? Meaning, the algo won't let the price go up more than a certain percentage from the lowest held position by any player? This would prevent its competitors from letting their positions ride.

I usually view the LRT on a 9mth Daily chart rather than the timeframe you mentioned.

It's not something I would normally use for momo plays like this....but I'll be interested to see if it does work on that timeframe you mentioned.

A trick I use when I am trading on a shorter timeframe (imparticular stocks with heavy HFT volume) is to watch intraday for a roundprint e.g. 145.00

These numbers are no coincidence...it is usually indicative of the bots running the stock prices up to these prices before they fade the move or just burn option premium

This can help to identify intraday tops or bottoms and sometimes major tops

Today I was looking at OPEN (roundprint intraday @ 62.00)

Check out GOOG all time high (844.00)
AAPL 12mth Low (419.00)
SRPT 12mth High (45.00)

This isn't a fluke it happens everyday on alot of stocks. You also see it a huge amount in After hours trading on stocks which have just reported earnings. This is where alot of the HFT's make $ as its quick and volatile trading.

Not sure it will help you with your trading style and the type of stocks you trade..but its worth keeping an eye on.

I guess that somewhat answers your question about HFT putting a ceiling on how high stocks can go ....I dont have the answer for the specific questions you asked though. I have done a little bit of work tracking range patterns on the SPX but its not something that is really going to help you.

Thank you for the explanation. I do find that currently the LRT is not helping since the price is already way above avg for the past year and my outlook is bullish.

   

I'll try to use it on my other trades and see how it pans out. Cheers

[TheCool]

This DOW rally is completley propped up by the FED

its really a hiest

smooth shit if you ask me

their sucking in the retail investor all the avergae joe sees is DOW all time high and they buy

me

im starting short positions on the DOW in the upcoming days

when investors run for the doors and the algoryhtmns catch on there will be big 500 + point drops

this markets a pickers market and if you can pick em thats good shit for you

but I rather ride the i
broad index trends

but what do I know?

[gsinplaya]

(03-25-2013 08:40 PM)TheCool Wrote:  

This DOW rally is completley propped up by the FED

its really a hiest

smooth shit if you ask me

their sucking in the retail investor all the avergae joe sees is DOW all time high and they buy

me

im starting short positions on the DOW in the upcoming days

when investors run for the doors and the algoryhtmns catch on there will be big 500 + point drops

this markets a pickers market and if you can pick em thats good shit for you

but I rather ride the i
broad index trends

but what do I know?

what do you see that makes you want to short this market ? what am I not seeing?

The indices have been trading in a wedge with zero momentum and trend. You can flip a coin as to which way the wedge breaks....

You are right though at the moment it's about picking stocks with relative strength or weakness to play....

[juice]

the trend is your friend

[TheCool]

Gsinplaya great question

I'll be touching on that tomorrow on my blog (thefilmoflife.wordpress.com) check it out if your interested

Now dont get me wrong im still long a few positions that are benefiting from this rally. But this rally is propped up and supporting by the fed that is a fact I will elaborate on further in that post.

The thing about it is the smart moneys holding positions and enjoying the ride while the retail investor is , us , the little guys are added to positions.

The Hedge Fund Managers and firms which control a great deal of the market are ready at any day to pull out and run for the exit.

IMO This economy simply doesnt support 14,500 DOW

But again

what do I know?

[iknowexactly]

(03-27-2013 02:35 PM)TheCool Wrote:  

Gsinplaya great question

I'll be touching on that tomorrow on my blog (thefilmoflife.wordpress.com) check it out if your interested

Now dont get me wrong im still long a few positions that are benefiting from this rally. But this rally is propped up and supporting by the fed that is a fact I will elaborate on further in that post.

The thing about it is the smart moneys holding positions and enjoying the ride while the retail investor is , us , the little guys are added to positions.

The Hedge Fund Managers and firms which control a great deal of the market are ready at any day to pull out and run for the exit.

IMO This economy simply doesnt support 14,500 DOW

But again

what do I know?

Quote from a famous investor:

"The market can remain irrational a lot longer than you can remain solvent"

[AntiTrace]

Closest thread I could find regarding stock tips:

Currently following TKECF. Tepco is the company that owns the reactor that melted down due to the Japanes tsunami some years back. It was trading for $20 prior to the disaster. It tanked and has experienced many ups and downs over the past years due to the uncertainty of a possible government takeover, lack of income due to all reactors being offline, uncertainty about the extent of compensation payments, and the anti-nuclear sentiment in Japan.

Most of the issues are passed, government control is pretty much ruled out, and reactors are due to be restarted in Japan sometime in the next year. Compensation payments are still a problem, but it looks like Tepco has weathered the storm and will return to profit once the reactors are started. Combine that with the decreasing value of the Yen, and it is starting to look like a solid long term play.

Currently trading in the mid four dollar range. I figure a 3 year goal of $12-$15 is obtainable.

[ozzyyooo]

My dad bought me 75 shares of JNJ in 1997. I still have them today.

[DVY]

I bought 10k worth of Corning at 12.80. Its now almost 15. I think itll hit up to 20-22 w/in the next year or two.

I am not an experienced investor, but the stock and earning seems oversized compared to the price.

Large up-front manufacturing costs w/LCD and LED factories coupled w/fluctuation in yen and won (now hedged), which are now basically established.

Earnings will increase for their core business 1) display- 36% because factory upkeep will be diminished (the biggest costs were trying to make the bigger and bigger screens. They have stabilized this fad and are now stopped pushing the super-large LCD displays.) 10-k seems to put cost reduction in manufacturing around 300-500MM. Another gamechanger is going to be willow glass- curved screens for phones, applewatch, google-glass, etc. Gorilla glass had essentially minimal profits, because of outsized up-front manufacturing setup, but willowglass has reduced expenses (they said 40%???, because of the fact that its similar to gorilla glass and it will come out in large spools instead of individual glass)

Their life sciences division- 8% is stable and growing.

The fiber optics 27% unit. Because FioS and other fiber is the "new wave" of internet. I think this unit will at least stay stable, but likely increase.

Ceramics catalyst/Filters/Environmental- basically stable division. W/increased pollution control but decreased new cars, I foresee this # dropping just slightly or staying stable.

I foresee a very very conservative earning of around 2B next year(compared to 1.5B this year) which at a 12 multiplier puts it at around 24 dollars a share. I think it has the potential to hit 30+.

Cliff- cheap price for earning, stable blue-chip company, 1.5 billion buyback last year, new "game-changing innovation" coming unto the market, CEO and CFO that have been with the company for 20+ years.

Disclaimers- Not a professional. My analysis may be off. Do your own research.