How many days do you take to go long or exit? The bigger the qty vs daily volume, the more critical it is to sell into strength, and use multiple day entry and exits. Obviously, if you are taking multiple days to get in or out, its something you plan to hold for a while. I agree with that 5 or 10% limit, normally. That's about the max you can buy or sell in a day without moving the price dramatically. After reading Jack's reply, I guess it was aimed at me, and to be honest, I don't understand a lot of what he is saying, for example: What does it mean to get in at .25? Was that the value of the stochastic? On a daily timeframe?
Dark pools are great, but if you don't get filled on first try look out. Maybe the best approach would be to find a linear correlation with an index or another stock with higher liquidity. When using a linear correlated stock don't become a "prayer trader" use it for a day or two to get out of your position. Happy Trading, Greg
Iam not quite sure who you trade with or your time frame or the stocks liquidity that your trading. I do this for a living and execute orders everyday for hedgies and pension funds that are a very high percentage of the average daily volume. Before anyone argues anything i say below let me just say this iam just giving advice from my experience.... Find a broker that you can pick up the phone and call the desk and get color from and make it more than 1 broker use acouple. Now with that being said iam not saying you cant do it on ECNs and with Dark pools but nothing helps more than picking the phone and calling a broker and have him make some waves... let him do his job... and no i dont want your business iam just giving advice that i have learned over the years
I agree with the broker approach, although not usually a choice for somebody paying a discount rate for doing business. Most clients that call a institutional broker are paying in excess of 1 cent per share. That would obviously be worth while for large share quantity, but you may also need in excess of a 1 million dollar account. Greg
Greg ...your correct in what you say i am very unsure of how or who he executes with...but i do know people that trade there account from there basement and use brokers like i stated...there account size is 5mill and the other guy is like 8 mill i cant remember who they clear....but iam assuming the thread starter isnt trading low priced pinks or bullies and if he is throwing around size of thin names he should really consider this option
He might do enough business with them. Can't hurt to ask. I use that to buy and sell sometimes. The penny a share is usually worth it as compared to spending days sitting there punching in small trades. If the commission is $2,000 for 200k shares, and you saved $10,000 in slippage by using the specialist, you are $8,000 ahead.
The 0.25 comes off the attached table. Anyone can keep track of the portfolio with a list. similarly they can keep a list of their trading universe. They can also list the batting order for each stream of capital The columns of the list can include many things. Several columns are usually devoted to leading indicators of price. One that I like is the column that compares the day's volume to the average volume by doing a calculation of the day's volume compared to the average volume. 0.25 would be a value of 25% of average volume. when that occurs within an hour or so of open after days where the total days volume is under 0.25, then you are seeing volume leading price. Price will begin to move within the next hour. I trade 3 beta stocks. So I am used to seeing the stocks move and make a lot of money when they break out each time. for doing equities trading, iti a good idea to know before price moves that it is going to move. It is also nice to know that it moves a given % a day when it moves. I rankstocks by how many % a day they move when they preak out. the NTRI moves 10% a day for three days. I see that it is going to break out by leading indicators. Then I trade it for the three days. The attached chart is for a 30 min bar chart. DU is the values before break out. FRV is the first day of breakout. First rising volume as a leading indicator of price. Peaking is for getting out (exit). If the stock's volume is not keeping up, it is finished making money in that cycle. I use this chart for any stock I trade. It is a universal chart for volume leading price to make money. Say you have 8 30 dollar stocks and you have 100,000 shares of each. They go up in price according to their calculated rank after you buy them as volume goes through the .25 in the first part of the day. You hold for a few days and sell. I make batting lists for stocks in my streams on Sunday am's. I note which day, mon, tues or weds that they will BO. There are 3 stocks for each stream of money. Weds evening I repeat this batting list. I use the percent volume on the lists to sort the universe so I can see when they are going to breakout in the next few days. to go from 100 shares to 1000 shares takes 100 days. to go from 1000 shares to 10,000 shares takes 100 days. to go from 10,000 shares to 1000,000 shares takes 100 days. I have a limit of 100,000 shares per stream and I add streams up to a certain point. After that I do sector rotation with larger blocks of stocks. ET does not chat about sector rotation since it is only done by people with money. I find that most people are much less efficient in making money than what the market offers. this is because they do not make up charts like the one Iattached. it does not occur to them to do charts as aids. they also do not do leading indicators of price very often volume is a leading indicator of price and their are leading indicators of volume. Once you use leading indicators of volume which lead price, it is quite simple to trade price and there is no risk. I do not use stops, for example. I have volume leading price at the peak of the trend. I have a leading indicator of volume at the peak as well. To do trading there is no aspect of guessing the future. A person only looks at data in the present and present leading indicators tell you how the future will move into the present. People who predict tend to look at the present and react to it all the time. This is the fighter pilot therapy Steenbarger offers Greenspoon at Kingstreet. Betwen prdiction and reacting there is a place called anticipation. Anticipation comes from leading indicators and removes prediction and reaction. Prediction and reactionhave accompaning emotions. MIT tests show them to be fear, anxiety and anger. Anticipation has three too: support, comfort and confidence. I hope a couple of people use the attached chart. It is a great way to use a leading indicator of price and it makes for very relaxed trading. The OP who started the thread isn't going to use it, nor will most others. Most people do not believe that a person can have 10 times their capital in 100 days. The people who have done believe it though. We have posted the list of batting stocks in ET for almost 3 years now. 2007 will complete going from beginner to expert in position trading stocks. A lot of people who started with stocks do not trade them anymore. They have moved on to trading commodities by using the same template. The money velocity there is 50 times what it is in trading stocks.
definitely not trading pink sheets, etc. my current broker is thinkorswim. like i said, i'm as retail as could be. maybe I'll look into the avenues you stated. the cost would be worth it if my orders executed at better prices.
Jack, What do DU and FRV mean on your table? So, you are saying you watch for high volume the first 1/2 hr. Ok, given the volume, how do you know what you should be willing to pay? Many times that big volume start moves the price 4 or 5%, where buying usually ends up being foolish. I'm happy to learn a better entry method.