How to properly scan for opportunities?

Discussion in 'Strategy Development' started by fatrat, Dec 12, 2005.

  1. fatrat


    Can anyone elaborate how they like to spot opportunities? Let's say the have a basket of 4-5 stocks, or perhaps even use some software like Trade-Ideas.

    How do you manage your focus to finding the right opportunities? I PM'd a few people about their trading setups, and they claimed they look at 4 stocks at once. How do you do that? 4 level-II, 4 T&S windows, no charts, jam packed onto 2-3 monitors?

    How do you -intelligently- switch from stock to stock, instead of running around like a headless chicken w/ missing opportunities?
  2. JORGE


    While I'm probably in the minority I don't use L 2 or T&S. I normally focus on about 10 stocks based on pre-mkt activity or intraday news and then use simple support and resistance. Today was slow, but still found opportunities with MYOG, ENCY, MNST, CHK, ARXT and KOSN. To make sure I don't miss too much, I set price alerts for stocks on my watchlist and spend my day watching for additional opportunities.
  3. fatrat


    How did you know to look at those stocks this morning? What triggered your interest? Just simple answers would help a lot.

    I churned a lot today. I.e., commissions ate up whatever I managed to steal from the market.
  4. JORGE


    I get most of my ideas off and (don't laugh) from watching the ticker at the bottom of CNBC in the pre-mkt. There was a ton of pre-mkt activity on MYOG and ENCY, and both gave nice moves off the open. I had been watching ARXT and CHK last week because both companies had priced secondary offerings on Friday and could not hold their offering prints. ARXT had continued weakness today while CHK opened above the offering price today and formed a nice base under 32. KOSN hit my list because they came out with what seemed like good news intraday, but the stock reacted negatively and provided a nice set-up to the short side after trading between 6.1 and 6.3 for about 20 minutes before breaking down. MNST is a stock I trade regularly and it was named as an addition to the NAZ 100 on Friday.

    Tomorrow I'll be watching stocks which were active tonight; Cramer plays OSUR, ELOS, CYNO, URS, and VRSN. Earnings plays SORC, and TSG. OSUR will be real interesting as it is trading down 1.5 after hours after Cramer said sell because of negative NYT article, but the news was out pre-mkt today, so might be an overreaction.
  5. JORGE


    I realize the above plays look easy in hindsight, but I use tight stops and will often take a few small losses before catching a move.
  6. I use 4 level two boxes and 1 T&S. I only use T&S's to go back to see what happened in a particular stock. I definitely do not trade off of T&S.
    Once you know what to look for, you can start to watch many many more stocks. Right now, I would say I can effectively watch 8-10 stocks (that do between 500K-3 million shares a day) and know pretty well whats going on in each. But it takes time to be able to multitask like that.

  7. So when you say level 2, are you trading naz stocks. I thought you traded only NYSE.
  8. wrong. alevel 2 box is jsut a box that shows all the price levels a stock has wether its a naz or nyse stock. example is ge. it trades on all ecn's and the nyse so maany times instead of waiting 20 seconds for for a nsye fill one could hit the ask on arca or island which is usally the same as nyse on fat stocks and get not only a rebate on iland for taking liquidity in a nyse stock using island but get an instant fill. one could also nx a fill threw sdot and get a quick fill on 1099 or less shares. i have 10 level 2 boxes open so i can watch many stocks. all i ahve to do is hit the space bar to move between boxes
  9. I understand all of that, but he mentioned he trades stocks that do under a mill in volume. Wouldn't one want to be looking at NYSE's open book? What good is a level2 box, you might as well be looking at a level 1 NBBO quote box and save some space.
  10. fatrat


    You need the level-2 box all the time. Even stocks under 1 mil shares use ARCA and ISLD, it's just there might be less depth there.
    #10     Dec 12, 2005