Australian (ASX) Stock Market Forum

Scalping Lynas experiment

Jump to new
Gringotts Bank said:
yep 50k*.11%=$55.

Getting smashed today. Poor entry will wipe off a lot of profit.
Click to expand...

One thing I don't understand is a lot of your entries have been on or close to open, which to me sort of defeats the aim of trying to read the tape for entries.

It seems to me any sort of strength overnight and you are looking to enter as soon as possible, which might be okay if the market plays along but the last week or so we have seen the markets strong opens wiped out by very weak closes, looking at a XAO chart it is very obvious we are at a fairly strong resistance point and we are really struggling to push through it, so entering early on overnight strength doesn't seem like the best strategy to me.

The other thing I would be looking into if trading this stock in this manner would be - if the XAO has a strong open how often is LYC's high printed in the first hour or so and if a weak open how often is the low printed in the first hour or so.

ATM it appears to me that your entries really are just guess work. While I agree this strategy has the potential to be profitable I would be looking for more data/stats to support my entries and ways to incorporate stops and maybe even targets to reduce losses and maximise profits. Under the current set up I really feel 1 or 2 bad days could wipe out 1 or 2 weeks of profit.
 
sammy84 said:
From memory each position is $50k, which is the brokerage comsec would charge. Makes me think GB is using comsec or something similar. Not the broker to be using when scalping.
Click to expand...

Yer I forgot he would be above the limit for the $19.95 trades.

I dont use IB but assume they would still be cheaper on a $50k trade.
 
Agree with no more fours

I think there are many small things that can be done that have the potential for substantial improvement.
 
nomore4s said:
One thing I don't understand is a lot of your entries have been on or close to open, which to me sort of defeats the aim of trying to read the tape for entries.

It seems to me any sort of strength overnight and you are looking to enter as soon as possible, which might be okay if the market plays along but the last week or so we have seen the markets strong opens wiped out by very weak closes, looking at a XAO chart it is very obvious we are at a fairly strong resistance point and we are really struggling to push through it, so entering early on overnight strength doesn't seem like the best strategy to me.

The other thing I would be looking into if trading this stock in this manner would be - if the XAO has a strong open how often is LYC's high printed in the first hour or so and if a weak open how often is the low printed in the first hour or so.

ATM it appears to me that your entries really are just guess work. While I agree this strategy has the potential to be profitable I would be looking for more data/stats to support my entries and ways to incorporate stops and maybe even targets to reduce losses and maximise profits. Under the current set up I really feel 1 or 2 bad days could wipe out 1 or 2 weeks of profit.
Click to expand...

I do study the depth carefully pre-open nomore4s, and it's just been coincidence that I have been entering at or near the day's open. Today I won't be - atm, I'm bid at $1.15, but might change in the next few minutes. I'm also considering implementing that 4 level stop, which would have saved some money yesterday. I'm limited by lack of intraday data.
 
Mon___B:1.15___S1:1.16___S2:1.15
Tues___B:1.16___S1: 1.17___S2:1.15
Wed___B:1.17___S1: 1.14___S2:1.19
Thurs___B:1.145___S1:1.19___S2:1.17
Fri___B:1.19___ S1:1.21___S2:1.205
Mon___B:1.22___S1:1.21___S2:1.225
Tues___B:1.21___S:1.22
Wed___B:1.245___S:1.20

Summary paper profits: $62

Bid: 1.16
 
For the newbs out here, any tips on how might you go about reading market depth to determine whether the price is near the daily low?

I don't think you mentioned it in the thread, but it would seem like grail territory if you can do that...??
 
Bid: 1.20 - I guess I'm being a bit too cautious given what happened yesterday. Memory is a very powerful thing - better off without it when it comes to trading. I'll probably miss the trade altogether today.

Punta, let me see if I can do it first before I offer any comment! Hey how did your meeting with the fund go?
 
Gringotts Bank said:
Punta, let me see if I can do it first before I offer any comment! Hey how did your meeting with the fund go?
Click to expand...


Was good mate. They offered to set me up on their simulator.

I took your advice and I'm actually in the process of coding automated strategies using IB's java API to paper trade. For me this involves learning java, so it's going to take a wee while. Again, following advice here, I figure I am best off getting this going first before wasting anyone else's time....
 
Punta said:
For the newbs out here, any tips on how might you go about reading market depth to determine whether the price is near the daily low?

I don't think you mentioned it in the thread, but it would seem like grail territory if you can do that...??
Click to expand...

My personal view is it is very hard if not next to impossible on stocks, especially in the Australian markets. Even on futures markets where you have enough movement and volume to give you something to read it is very very hard to use the market depth as a stand alone signal for entry and exits.

Gringotts Bank said:
Bid: 1.20 - I guess I'm being a bit too cautious given what happened yesterday. Memory is a very powerful thing - better off without it when it comes to trading. I'll probably miss the trade altogether today.
Click to expand...

I'm guessing you've missed the low for today.
 
nomore4s said:
The other thing I would be looking into if trading this stock in this manner would be - if the XAO has a strong open how often is LYC's high printed in the first hour or so and if a weak open how often is the low printed in the first hour or so.
Click to expand...

Yep.
 
Gringotts Bank said:
Congrats, that must feel good to be offered that opportunity.
Click to expand...

Yeah thanks and thanks for the previos advice/comments too.

Now tell me how to spot the day's low coming!!!!

One thing you could do with this strategy is get historical intraday and backtest it properly, assuming the metrics you read are included in the historical intraday. You can get 1-year of NYSE intraday for about $100, and you could know whether your system is going to work, a lot faster than forward testing?
 
GB, take a trial of Spark which has market depth replay function (can't remember how far back the history goes).

IMHO it is obviously difficult to pick the low of the day (or close enough to it), and if you can do that with any degree of accuracy, LYC is probably the wrong instrument to exploit that skill anyway.

nomore4s said:
I'm guessing you've missed the low for today.
Click to expand...

You never know...
 
I've had a trial of spark already skc, some time back and it has two very useful features for day trading. One as you mention is the replay of intraday, going back one month. The other is the time stamp on the depth orders, where new orders look greener/redder in colour then old ones. Fresh orders coming into the buy side was always a good sign. Maybe I can get another trial on a different IP address!

punta I have an old set of intraday data from weblink, duration one month. Unfortunately it is chock full of useless data that makes testing impossible. If I had some sort of way of cleaning it up I could use it but I can't. Another spark trial might be in order.

I'm thinking of a different way of doing this, because today for eg. is taking up way too much screen time to be any fun... and I have to go to work soon. :)
 
nomore4s said:
Hahaha but if you do get in at a new low now it probably means you've missed the high for the day. Either way probably not a trade GB should be making.
Click to expand...

Maybe not, everything has rallied hard on HK open, be interesting to see if it is sustained.
 
GB, take a trial of Spark which has market depth replay function (can't remember how far back the history goes).
Click to expand...
I notice Iguana2 (Spark) is not a website now. I don't think they have folded up but a redirection to their new site would be good for business.
 
Top