Trading NASDAQ stocks with Jerry Olson & Ian Hodgson

[Jerry Olson]

well today was horrible for me bot MRK on MPD and it keep going down all day.. i dont know what to say since it broke down out of its range the bands moved further apart. i totally feel disgusted Grey1 not even a end of day bounce.

I can blame only myself for the losses. but itf anyone has any constructive criticism to add please feel free to post. I feel miserable

Hi Moreagr

I am sorry for your losses but are you using hard stops? Stop loss orders are a must. Never trade without them. May i also suggest that you stop trading NYSE listed stocks and move to Nasdaq type plays?

The Nasdaq is all electronic while MM,s are invlovbed more so with listed stocvks.

Just take a step back and relax. Regroup your thoughts and prepare to change the way you think and trade. Become more mechanical. Learn to read the charts.

We here will help you any way we can.

best to you and yours

 

[Jerry Olson]

The Markets Are Always Testing

Morning all

The stock market is always testing and retesting highs and lows. Last weeks lows are in the way right now so let's first see if they can hold. A key number to me is the S&P futures lows at 1245.00 watch that for support this week.

Next we do not want to see the DJIA break 10,000 that would not be pretty. We have the FOMC May minutes out this afternoon at 2.00 pm est. Should be fun eh?

Yesterday for the 2nd day in a row i am seeing signs of a bottom forming. The process of forming these bottoms are complex and take time. We need to back and fill, test and re test till the sellers are gone for good. On P&F the internals were much stronger than what was going on in the markets yesterday.

The markets are a discounting process. If we are going to slow later this year then stock prices are still a bt too high. The question is how much slower will we grow.

We have the all imporatnt employment number this Friday another fun day.

I suggest that everyone within earshot of this potential bottom start to accumulate a watch list of stocks to buy. Lot's of Fire Sale prices out there right now.

I am still long aapl from yesterday along with rimm, i traveled to NYC and got to the hotel a bit late. both will be higher in the next few days thats for sure.

I ask all traders pleasem protect ones capital since without it you have to go to work.... :cheesy:

best of luck today

 

[Jerry Olson]

I sold RIMM pre market at 66.40 made 40 cents. Yesterday this was the strongest stock in the whole market. I bought it at 66.00

now we know why, major upgrade this morning...are we having fun yet folks?......

 

[Racer]

ld. A key number to me is the S&P futures lows at 1245.00 watch that for support this week.

Next we do not want to see the DJIA break 10,000 that would not be pretty.

A thousand points by next week... that would be interesting

 

[MrMoto_1]

I was not going to post my P/L but i was asked to do so by few people.. so here we go .. Just one over night trade Short JOYG G the rest intra day to day . MAx drawdawn none as i run into profit shorting JOYG over night ( friday ) but my peak win was over 2K which i gave back some if it .

Risk management is a crucial key to LONG TERM TRADING .

RISK COMPONENTS

1) Risk to capital ( how to reduce risk on capital )
2) Risk to entry ( how to reduce draw dawn )
3 Risk to trade ( how to reduce risk while in a trade due to market spike )

Grey1

Thanks for changing your mind on posting your trades Grey! Your consistency and willingness to post your P/L's give everyone who is struggling to develop their personal strategy a boost of energy to persist!

Looking fprward to hearing more on risk management

Thanks for your posts!
MrMoto

 

[Jerry Olson]

A thousand points by next week... that would be interesting

hey anything is possible......................... :cheesy:

make that a break of 10,900

 

[Grey1]

I am already up $1270 .. two over night positions BRCM long SNDK long which i sold into the opening . The rest intra day . AKAM stung me by $399 because it was oscillating . I did not quite know why AKAM was beha ving the way it was. There again there are lot i donot understand in the market,. Trends were exhausting faster than normal so if you are thinking of trading to day then use oscillators than Trend following indicators . IMHO ofcourse


Grey1

 

[Grey1]

OK .. I gave back a lot to day and partially was due to large exposure to the market and IB not filling some of my orders. But that is no excuse.

I lost fair and square to JOYG and AKAM but done very well on RMBS.

After the announcement the market was going through oscillations for a while and was extremely jerky . All in all I am up $849

Max drawdown was around $340 Peak was + $1600 ish final win $840. My target was $2500 .

 

[fokjock]

Hi Grey,
Sent you a message.
Regards,
D

 

[eurotrader52]

Market recovering AAPL rotten (-4%)... but 60 calls June at a discount QAAFL

AAPL potential rebound here after huge pullback from 73! Huge gain today in the 60 puts (QAARL) if you were agile

 

[TheBramble]

OK .. I gave back a lot to day and partially was due to large exposure to the market and IB not filling some of my orders. But that is no excuse. .

Grey 1 - panic attack. Exposure sounds like risk gone wrong. What happened? You were my risk guru and you're telling us it got you?! Risk management is basic arithmetic. IB not filling orders is a risk we assume and calculate. What does large exposure really mean? What does IB not filling orders mean in the structured application of risk control?

At the risk or baring all - how did it get you? I'd like to avoid it for a while longer myself...

 

[Grey1]

Grey 1 - panic attack. Exposure sounds like risk gone wrong. What happened? You were my risk guru and you're telling us it got you?! Risk management is basic arithmetic. IB not filling orders is a risk we assume and calculate. What does large exposure really mean? What does IB not filling orders mean in the structured application of risk control?

At the risk or baring all - how did it get you? I'd like to avoid it for a while longer myself...

My man Tony

In the world of block trading there are issues that we have never discussed . if you have a hedged position and decide to close them , then one would assume that a click of button would do it. This does not often happen and eventually you end up with partial dumping which leaves one of the positions unsafe . Under volatile circumstances a few minute delay could cause over exposure and hence financial loss. just like to day .

This is the reason big boys who trade 100 Plus Blocks pay extra for VWAP execution .

Grey1

 

[TheBramble]

My man Tony

In the world of block trading there are issues that we have never discussed . if you have a hedged position and decide to close them , then one would assume that a click of button would do it. This does not often happen and eventually you end up with partial dumping which leaves one of the positions unsafe . Under volatile circumstances a few minute delay could cause over exposure and hence financial loss. just like to day .

This is the reason big boys who trade 100 Plus Blocks pay extra for VWAP execution .

Grey1

OK. Thanks. I'm happy to go to sleep knowing these problems only beset those who trade rather larger size than I do.

But surely, risk is risk - whatever the size?

 

[snowdej]

OK. Thanks. I'm happy to go to sleep knowing these problems only beset those who trade rather larger size than I do.

But surely, risk is risk - whatever the size?

I would agree about risk being risk. But what kind of size would you call small? And how would you predetermine the amount of risk you were prepared to take either in cash or %age terms?

Do you always stick to it? I can see what Iraj does, warts and all. If this is a bad day then I hope its my worst.

I don't think we could argue with Grey1 on his results, which we see everyday... Anyone can post a good day here and there.

Jools

 

[TheBramble]

Jools, I'm the last person to dis Grey 1 for all sorts of reasons, and Iraj knows that.

And what do I call small in terms of trade size? Irrelevant. But what I call max in terms of risk is 1% of trading capital.

Do I stick to it? No. That's a max. I NEVER go above 1%. I don't hold overnight and I don't get into positions where, relative size or not, I can't get out of within my pre-defined risk profile.

I'm sure there is a distinct possibility that the dynamics change to a large degree as you ramp up size.

And it would be useful to understand more of precisely what changes and how - and how to mitigate any additional risks is return for those leveraged rewards.

 

[Grey1]

But surely, risk is risk - whatever the size?

Tony,

Not correct Tony ,,, it is the size that determines the risk . If I left an over night position open with 5 stocks of BRCM would that carry the same risk as 5000 stocks. of course not .

Study of ruin starts with position sizing .

Grey1

 

[MrMoto_1]

Jools, I'm the last person to dis Grey 1 for all sorts of reasons, and Iraj knows that.

And what do I call small in terms of trade size? Irrelevant. But what I call max in terms of risk is 1% of trading capital.

Do I stick to it? No. That's a max. I NEVER go above 1%. I don't hold overnight and I don't get into positions where, relative size or not, I can't get out of within my pre-defined risk profile.

I'm sure there is a distinct possibility that the dynamics change to a large degree as you ramp up size.

And it would be useful to understand more of precisely what changes and how - and how to mitigate any additional risks is return for those leveraged rewards.

I had the same kind of day today as Grey1, up big in the morning and steady losses all afternooon cut the purse in half.

I am thinking that sometimes there does not seem to be enough steam in the market for it to behave normally.

I have found that a rough barometer of the open can usually be found here:
http://dynamic.nasdaq.com/dynamic/premarket5dayvolume.stm If volume is low then opportunities are usually limited for the morning session. The higher the volume the more good opportunities seem to be available.

Has anyone found a "stop trading cause the market is in a coma" indicator that is numeric or fact based??? If so I would love to hear about it!!

Love to participate in developing one too. Suggestions?

 

[moreagr]

thank you both Grey1 and Jerry!

Grey1 question regarding pairs.... are all you trades paired and not one legg?? and how do you filter out news effected stocks or stocks effected by sector?? do you pick stocks on high coerrelation or just over bot and oversold conditions on the intra day charts like under vwap over vwap?

I realize this is a good market neutral strategy and has gotten my interest in the last year but have never applied it in real time.

Jerry thanks for the advice the most difficult thing for me is when i have a few days of winning and dont want to admit my error and bam down -1700 on MRK in a few hours. that hurts

maybe i should use a bracket order and another front end like buttontrader or ninja trader to semi automate my exits through IB

thanks again guys!!

 

[Grey1]

I had the same kind of day today as Grey1, up big in the morning and steady losses all afternooon cut the purse in half.

I am thinking that sometimes there does not seem to be enough steam in the market for it to behave normally.

I have found that a rough barometer of the open can usually be found here:
http://dynamic.nasdaq.com/dynamic/premarket5dayvolume.stm If volume is low then opportunities are usually limited for the morning session. The higher the volume the more good opportunities seem to be available.

Has anyone found a "stop trading cause the market is in a coma" indicator that is numeric or fact based??? If so I would love to hear about it!!

Love to participate in developing one too. Suggestions?

Mr Moto

you are Spot on . 100 % correct. Trading during low volume and consolidation is very difficult. I have always avoided immediate open but I still trade the consolidation which is not all that clever. program traders are at best during consolidation and it feels like playing chess with a computer. My views were different years ago .

Grey1

 

[Grey1]

thank you both Grey1 and Jerry!

Grey1 question regarding pairs.... are all you trades paired and not one legg?? and how do you filter out news effected stocks or stocks effected by sector?? do you pick stocks on high correlation or just over bot and oversold conditions on the intra day charts like under vwap over vwap?

I realize this is a good market neutral strategy and has gotten my interest in the last year but have never applied it in real time.

Jerry thanks for the advice the most difficult thing for me is when i have a few days of winning and dont want to admit my error and bam down -1700 on MRK in a few hours. that hurts

maybe i should use a bracket order and another front end like buttontrader or ninja trader to semi automate my exits through IB

thanks again guys!!

Hi ,

I pair trade in many ways,

1) extreme VWAP condition with 2 stocks at either bands ( Not bothered about correlation ).

2) Divergent pair trade.. Highly correlated stocks such as BRCM against RMBS. This is a great play . Two highly correlated stocks who usually shadow each other for some reason diverge to create an opportunity .. These stocks often converge in later min/hour/ days .

30 Exhaustion point . This methodology is simple you just pick two stocks that their momentum has been exhausted one on the LONG and the other on the SHORT side. Like AMZN SHORT against LONG BRCM .. No correlation needed . I have already explained how to find the exhaustion points in my previous postings. ( you guys remember bullish momentum from AMZN , EBAY , YHOO the other day )