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- 7 September 2009
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Sorry for being a slack bastard and not researching this better, but maybe people will be amused by my flailing about.
Ok, so I don’t have time to read squat, pretty much, and won’t until February (domestic situation). But I watched some of my long-term shares moving about, saw some patterns, and start doing a wee bit of day trading. It’s been good. I’ve had two experiment weeks and have made money – I mean, two weeks isn’t worth a damn thing from a statistical point of view, there are grannies who picked something at random that made 200% in the last couple of weeks, but it’s made me hopeful I can build on this.
But I don’t know what it’s called, and my occasional squinting at forums and blogs hasn’t helped. I want to learn more, but I need to know what the thing I’m doing is called so I can start doing word searches and buying books.
Here’s what I’m doing: I’m looking for “panic” stocks – stuff that’s had a big recent fall, or a big recent rise, preferably both (BTA was the one I first noticed, for example, though post-dividend it hasn’t come back to my pattern, and I’ve since learned the difficulties of low volume). Doesn’t matter if they’re going up or down overall at the moment, though.
For some of these, there are shares that pretty consistently (say, around 75% of the time) rise 2% or more during the day *after the open*, and, on those occasions they don’t make that 2%, open at their high (so all-or-nothing). Even shares in freefall are looking to rise, pretty often, and take an hour to realise they don’t have legs. People looking for the bottom, I guess.
So the basic strategy is to buy at the open, sell at what I think they’ll safely reach (within an hour or so), and at the same time NOT buy when I see they’re going to fall from the open.
Finding trades: I’m using absolutely dodgy tools, embarrassing really. I know that – this was just “experiment week” (twice). So to find shares I like, I’m looking at a Commsec OLHC chart (? – the one with a bar and two dots) at two months timeframe, and seeing how many of the little open-price dots are a good chunk below the top of the range line.
I’d like to go into past intraday data, but I don’t have access to that yet – so I’m making big assumptions on when that high is reached (I want to be out by 11:30am at the latest). I try to watch the current intraday stuff for a few days, but yeah, big assumptions. And I find them by looking at shares pretty much at random. God, it makes me a bit embarrassed to write this. I know I’m using a rock to do surgery here.
Trading: deciding to back out of the open (ie decide it’ll fall) or deciding when to sell is based on the DOM (again, on Commsec, mashing “get quote” every few seconds, and tabbing through the different stocks I’m watching. *shame*). I can see big blockades on the sell or buy, and can count sellers / shares close to the price to get a feel for which way it’ll move (eg: those guys piled up there expect the price to rise, and there aren’t many sellers until X, so I think they’ll come up, and after X there’s a lot of clear space to Y, so if it breaks through that, then... etc).
I’m also watching how many sellers / shares are jumping in (the number of each being less relevant than how it changes – are sellers drying up? Are buyers piling on?), and paying close attention to the dog bastards (I kid, I kid) who are feeding slowly into a price to dump shares into a clump of buyers without turning up on the DOM and scaring honest folk like me.
(DOM being that side-by-side list of sellers and buyers, with 10 (?) price levels showing number of shares and sellers at each price – does everyone call it a DOM, or is that just Commsec? Sorry if I’m being confusing).
Anyway, so far my entries have been perfect (I have never hopped-on to a faller-from-the-open yet), but my exits are a lot harder (obviously I’ve missed a fair bit of rise now and then, though that’s to be expected, but also have held on too long and fallen too fast and made a loss. I’ve never gone past my arbitrary stoploss of 1.5%, so that’s something, but knowing the difference between a price stopping breath and actually keeling over dead is something that I haven’t gotten the hang of yet).
Overall it’s been profitable – perhaps TOO profitable, since I earned more in those 20 hours (starting at about 9am to read stuff, then trading ‘till 11 on average) than I make at work in 75 hours of regular employment, and that surely can’t be sustainable(both weeks I made 6%, FFS – I know that won’t continue). So now I’m worried I’ll get too cocky...
Going on from here: my most obvious problem was Commsec. I was paying a bloody awful 0.3% each way, and that ended up taking a big chunk of my profits. The other issue was slow-ass orders, which made me suffer a few times. Oh, and I couldn’t research squat – I need to be able to do a search for more targets, and track them better.
That’s easy to correct: I’m going to get IB and spend a couple of months paper trading to get the hang of it and to get some better numbers on what I can expect, plus invest in some more / bigger monitors (I’m on a laptop at present).
I also made some terrible trades while the baby was climbing my leg and bashing the keyboard, with my worst loss coming when he needed a nappy change right after his keyboard-smacking had (unknown to me) triggered a trade I’d set up. Came back 5 minutes later to find an "at market" order I hadn’t intended to go in had bought and then spent the whole bum-wiping period falling. That sucked. From February the kids are in childcare in the mornings, so that’s that one fixed...
I’ve also read a bit about resistance levels around here, so I’m starting to use that as a second-opinion on how the DOM is moving (not trading now, just watching while I get my gear in order). Got a ways to go there, of course.
Anyway, there it is.
What’s that called? Is there anything obvious I’m doing wrong?
Is this all just a really bad idea? Like, a classic blunder or something?
Thank you to anyone who read all of that...
Disclaimer: in case it's not abundantly obvious, I'm a newbie and don't know a god damn thing. Anyone taking my advice is insane and will lose all their money.
Ok, so I don’t have time to read squat, pretty much, and won’t until February (domestic situation). But I watched some of my long-term shares moving about, saw some patterns, and start doing a wee bit of day trading. It’s been good. I’ve had two experiment weeks and have made money – I mean, two weeks isn’t worth a damn thing from a statistical point of view, there are grannies who picked something at random that made 200% in the last couple of weeks, but it’s made me hopeful I can build on this.
But I don’t know what it’s called, and my occasional squinting at forums and blogs hasn’t helped. I want to learn more, but I need to know what the thing I’m doing is called so I can start doing word searches and buying books.
Here’s what I’m doing: I’m looking for “panic” stocks – stuff that’s had a big recent fall, or a big recent rise, preferably both (BTA was the one I first noticed, for example, though post-dividend it hasn’t come back to my pattern, and I’ve since learned the difficulties of low volume). Doesn’t matter if they’re going up or down overall at the moment, though.
For some of these, there are shares that pretty consistently (say, around 75% of the time) rise 2% or more during the day *after the open*, and, on those occasions they don’t make that 2%, open at their high (so all-or-nothing). Even shares in freefall are looking to rise, pretty often, and take an hour to realise they don’t have legs. People looking for the bottom, I guess.
So the basic strategy is to buy at the open, sell at what I think they’ll safely reach (within an hour or so), and at the same time NOT buy when I see they’re going to fall from the open.
Finding trades: I’m using absolutely dodgy tools, embarrassing really. I know that – this was just “experiment week” (twice). So to find shares I like, I’m looking at a Commsec OLHC chart (? – the one with a bar and two dots) at two months timeframe, and seeing how many of the little open-price dots are a good chunk below the top of the range line.
I’d like to go into past intraday data, but I don’t have access to that yet – so I’m making big assumptions on when that high is reached (I want to be out by 11:30am at the latest). I try to watch the current intraday stuff for a few days, but yeah, big assumptions. And I find them by looking at shares pretty much at random. God, it makes me a bit embarrassed to write this. I know I’m using a rock to do surgery here.
Trading: deciding to back out of the open (ie decide it’ll fall) or deciding when to sell is based on the DOM (again, on Commsec, mashing “get quote” every few seconds, and tabbing through the different stocks I’m watching. *shame*). I can see big blockades on the sell or buy, and can count sellers / shares close to the price to get a feel for which way it’ll move (eg: those guys piled up there expect the price to rise, and there aren’t many sellers until X, so I think they’ll come up, and after X there’s a lot of clear space to Y, so if it breaks through that, then... etc).
I’m also watching how many sellers / shares are jumping in (the number of each being less relevant than how it changes – are sellers drying up? Are buyers piling on?), and paying close attention to the dog bastards (I kid, I kid) who are feeding slowly into a price to dump shares into a clump of buyers without turning up on the DOM and scaring honest folk like me.
(DOM being that side-by-side list of sellers and buyers, with 10 (?) price levels showing number of shares and sellers at each price – does everyone call it a DOM, or is that just Commsec? Sorry if I’m being confusing).Anyway, so far my entries have been perfect (I have never hopped-on to a faller-from-the-open yet), but my exits are a lot harder (obviously I’ve missed a fair bit of rise now and then, though that’s to be expected, but also have held on too long and fallen too fast and made a loss. I’ve never gone past my arbitrary stoploss of 1.5%, so that’s something, but knowing the difference between a price stopping breath and actually keeling over dead is something that I haven’t gotten the hang of yet).
Overall it’s been profitable – perhaps TOO profitable, since I earned more in those 20 hours (starting at about 9am to read stuff, then trading ‘till 11 on average) than I make at work in 75 hours of regular employment, and that surely can’t be sustainable(both weeks I made 6%, FFS – I know that won’t continue). So now I’m worried I’ll get too cocky...
Going on from here: my most obvious problem was Commsec. I was paying a bloody awful 0.3% each way, and that ended up taking a big chunk of my profits. The other issue was slow-ass orders, which made me suffer a few times. Oh, and I couldn’t research squat – I need to be able to do a search for more targets, and track them better.
That’s easy to correct: I’m going to get IB and spend a couple of months paper trading to get the hang of it and to get some better numbers on what I can expect, plus invest in some more / bigger monitors (I’m on a laptop at present).
I also made some terrible trades while the baby was climbing my leg and bashing the keyboard, with my worst loss coming when he needed a nappy change right after his keyboard-smacking had (unknown to me) triggered a trade I’d set up. Came back 5 minutes later to find an "at market" order I hadn’t intended to go in had bought and then spent the whole bum-wiping period falling. That sucked. From February the kids are in childcare in the mornings, so that’s that one fixed...
I’ve also read a bit about resistance levels around here, so I’m starting to use that as a second-opinion on how the DOM is moving (not trading now, just watching while I get my gear in order). Got a ways to go there, of course.
Anyway, there it is.
What’s that called? Is there anything obvious I’m doing wrong?
Is this all just a really bad idea? Like, a classic blunder or something?
Thank you to anyone who read all of that...
Disclaimer: in case it's not abundantly obvious, I'm a newbie and don't know a god damn thing. Anyone taking my advice is insane and will lose all their money.
