October US Equity Trading

[wysinawyg]

Grey1,

Sorry if you've mentioned before, but are you short EK and long SBC on an expectation of them reverting to mean as it were or long EK and short SBC on the basis that EK is stronger?

wysi

 

[Grey1]

yes, correct .. As soon as one of them reverts to its mean the positons are closed.. I will post a further chart after the trade is over .. Now I have to wait and see.. I am hoping EK to collapse as DOW is in negative ..

 

[Grey1]

this is the after effect of mean reversion ..

EK has now reverted back to its mean... The blue line is EK's VWAP @ 23.72.. can you see how SBC is reverting to its mean as well.. Just keep your eyes on the trade in real time..

 

[Grey1]

Risk managment is often confused with money managment.. I had no interest where the market was going to go ( even though technically speaking it should continue in the direction of previous trend which was DOWN ) .. Even if i was wrong still would make little affect on my strategy plan .. ( except that SBC would revert instead )

I have posted the two charts in real time for you guys to look at the risk of applying such a strategy ... This was a simple risk controlled trade than trying to predict the market direction .. JESUS GUYS NO ONE CAN PREDICT THE MARKET DIRECTION ... ( God is excluded)


Also can you watch VRTS trade? DOW down 30 points MSFT in negative but VRTS going strong .. VRTS was a friday,s swing trade and tomorrow is its last day ...

 

[Grey1]

First EK reverted back to its VWAP and then SBC.. The chart below speak for itself.. Those of you who have been watching the trade in real time can now see the logic behind taking a Risk controlled trade such as above..

 

[Grey1]

If it makes you feel better using a conventional MA technique to trading then at least introduce volume into the equation ..

This is a good article..

 

[schoe]

Hi Grey, Can you tell me which software you are using please to chart these trades against vwap and each other. Thanks

 

[Grey1]

Schoe,

This is the realtick platform ... it suits best for momentum trading .. Limited on TA indicators but excellent in other areas..

 

[Grey1]

Sold 1/2 VRTS @ 35.32 ( + $1.85).. Raised my stop to 35$ letting the last 1/4 to run till Wednesday close... I never know when to close a good trade , so decided to sell 1/2 instead of 1/4.. ( an optimum exit is a result of PURE LUCK IMHO than trader's skill.. I was not born lucky )

Did not get many signals today due to extreme choppiness of market.. Does DOW close up or down or ---> GOD knows

 

[keano]

good stuff Grey1. You make a great contribution to these boards and have given me a few ideas for when i can eventually make the jump from trading just the indicies to US stocks aswell. One day. Keep up the good work.

P.S Who was it the other day who asked about whether trading simulators were realistic, as they were suprised how much pretend money they were making? There must be something going on, lol. For the last 5 days i have averaged 112c per day, trading a pretend 100shares at a time on a direct access simulator I'll find out one day

 

[Trader333]

Keano,

Simulators just do not reflect reality and you will see this very
clearly when you start trading in realtime. I used several before
I started trading for real and like you made handsome profits.
When I started for real it was never the same and I had to adjust
and refine my whole trading strategy which works well for
me now.


Paul

 

[boy]

Aye Paul, There's no such thing as a poor paper trader.

 

[FTSE Beater]

Hi all

I believe paper trading and simulator trading do have a part to play to see if an idea or a certain style works. I read a thing somewhere that says you should half the points total on a simulator to get the true return value - I think that's fair.

Did anyone follow the Chinese stocks today?
There was a major wake-up call today in their volatility. This came from www.briefing.com

13:32 ET SOHU Sohu.com: SMS growth in Q3 may be light, overall growth intact - Piper (33.18 -2.33)
More to follow...


13:32 ET Weakness in Chinese Net stocks attributed to Piper Jaffray intraday note
Sina.com (SINA 38.68 -2.78) and Netease.com (NTES 64.72 -2.83) now down 6.7% and 4%, respectively.. details to follow

13:50 ET SOHU Sohu.com: details from Piper Jaffray note (33.45 -2.06) -- Update --
Piper Jaffray says their research indicates that a number of minor issues may have slowed the rate of SMS growth down temporarily in Q3 (China Mobile's SMS message growth was substantially below previous qtrs, China Unicom gaining share on China Mobile); however, firm believes that SOHU (and SINA and NTES) would not be impacted by mkt share shift from one carrier to the other, and believes that SOHU is likely to report in-line results when they report on Oct 23, with any shortfall from their SMS rev est very likely to be offset by strong advertising; in addition, firm believes their ests going forward may be a bit aggressive, as they may not have properly factored in Chinese seasonality (Q4 weakness). Maintains Outperform rating and $44 target on SOHU.

...and this was the reaction on the charts

Just goes to show, no matter how much planning you do - sometimes there are things that you can't control

 

[Grey1]

FTSE,, I never liked these stocks for 6 reasons..

1) Wide spread
2) IB wont let you to short them ( some times do )
3) too much random movements..
4) Can't asses the risk of the trade soon enough to get on board
5) difficult to get a feel of support and resistance on l2
6) go to reason number 4

Saying that ,I have still traded them and as a result have lost few hairs...

 

[Trader333]

FB,

In my view these stocks were untradeable today precisely
because of what you have said, the volatility was just too great.
I did watch them but, as you also said, on the Level II screen they
were all over the place and there were no low risk trades to be
had. By that I mean entering a trade with a risk of 8c or less. In
watching the level II screen the inside bid was swinging wildly by
around 30c to 40c in a few seconds and that was enough for me
to pass on all of them.

Grey 1,

When you said you traded them was that profitably or not ?



Paul

 

[Grey1]

paul,,

some of them was profitable some was not.. Those profitables ones was result of luck than my knowledge because things was going too fast to be able to undertand the underlying reasons... I still can't trade them ..

 

[FTSE Beater]

Hi Paul

I was thinking that as an after thought.
Surely a L2 screen wouldn't be able to keep up.
I couldn't even think about getting a short fill either.

Could you imagine being long just before the drop

<hr>
Hi Grey1

...but apart from those 6 reasons
Your right. Not easy trading stocks

 

[Naz]

Hi Mark,

When i see you next i'll show you a level 2 set up and explain whats happening 30 secs before a $4 collapse in NTES.

I like trading these stocks because they're volatile, they trade as a triple entity.They've got a decent axe who's the same in each stock.They're made for the direct access trader who has a decent level 2 direct access set up and can manually work his order.They give fast moves in the first half an hour.
Even if the longer move isn't there the volatility assures of the level 2 scalper the potential to scalp a profit.NTES very easily runs from one whole number to another when its momentum is strong.In the daily charts SINA and NTES love bouncing off their trend lines to give the longer term trader opportunities.

The down side is that they're hard to short through many brokers.

 

[Naz]

In at a touch over $59

 

[Naz]

Out for nearly a dollar run in about 1 minute.
That is why i like NTES, it has so much momentum when it moves, you can just ride the wave.The only problem is when its fast you just have to work realy quickly and just work with what ever amount of shares you can grab.