Hi Brian, I think it's part of life. This year has been very unstable due to rising oil prices and Middle East crisis. I am doing what I can to do well in such a bad market nonetheless. Learning the pros and cons of opening trading is one way, and I've learned a few things already thanks to the great people on this forum.
Regards, intermilan04 --- In amibroker@yahoogroups.com, "brian.z123" <[EMAIL PROTECTED]> wrote: > > Intermilan004, > > Thanks for your post as it raises some interesting trading issues. > > 1. 10 20 year trading systems. > > I empathize with you that your `tried and tested' system is not > going so well. > The market can appear cruel and capricious at times. > When I was at school I was not a mathematics geek, but, since > becoming a `trader' I sleep with a book on probability theory under > my pillow. > > If you toss a coin often enough extreme sequences will occur. > In fact, statistically speaking, they can occur at any time. > Even a slightly biased coin will behave in a similar manner. > Extreme winning sequences or extreme losing sequences can occur in > average systems or even `good' systems. > If you have traded a system on a daily basis for 10 years that is a > statistical set of 2520 trades, which is quite a small set. > > I also have a theory that the nature of the markets has changed in > recent years due to the increased use of computers. > Look at the trading power that programs like Ami place in the hands > of retail investors. > This is a relatively new phenomenon. > At the least I would expect this to lead to more short-term > volatility. > I stress this is only a theory and I have no evidence to prove the > argument. > > 2. Trading at the open. > > I have only been taking trading seriously for 4 years. > Even then my first 2 years were mostly wasted time and money, > despite the fact that I paid for trading `guru' advice and > bought 'sure thing' training material. > Even after 1000's of hours experience I am still just serving my > apprenticeship. > So even though I intend to trade the open, as it is a major part of > the `business', I postponed my studies in that area while I pursued > easier pickings elsewhere. > > Thanks to your topic and the posts of others I have learnt a bit > more about how different markets and traders treat the open and that > some markets/brokers may `guarantee' all participants the open > price, I stress the word might. > I still have a lot of work to do before I fully understand the > subject. > > So far I have only watched the Australian equity market on this one. > The ASX site has some very good educational material available. > From their site: > > Calculating OPening & Closing Prices. > > The same formula is used to calculate: > Opening prices at the start of each trading day. > Closing prices at the end of each trading day. > Float prices. > The price of a security after a trading halt or suspension has been > lifted. > The price of a security after a new listing. > > How are opening and closing prices calculated? > > The opening and closing price for a security is determined by a four > step approach involving the use of conditional decision rules. If a > clear result cannot be achieved when the first decision rule is > applied, the model progresses to the second decision rule and so on. > The decision rules are always applied in the same order. > Schematically; Principle 1 achieves a subset of potential auction > prices from the list of overlapping buy and sell order prices. > If the subset consists of one price only, this becomes the official > auction price and the process concludes. Should the application of > Principle 1 achieve more than one potential auction price, the > algorithm moves to Principle 2 to narrow down the options. If > Principle 2 eliminates all but one of the options, the remaining > price becomes the official auction price and the process concludes. > If however, the auction price is not determined by applying > Principle 1 or Principle 2, the process moves to Principle 3 and > then Principle 4 if required. > > The full article, including market depth tables can be viewed at: > > http://www.asx.com.au/investor/education/basics/open_Close.htm > > The problem I had with this particular market was that I couldn't > see any correlation between the pre-market depth and the actual > opening price, without access to the algorithm used. > In all markets, in general, opening gaps have to be handled on the > fly, and also, if 1000 traders are queued to buy the open, but only > 10 are queued to sell it, some-one has to miss out. > There is also the issue of opening volatility. > In the Australian market, the price after 15 minutes, is often miles > away from the open, so this needs to be managed. > Volatility is a two edged sort and can work for or against the > trader. > Also opening gaps do not have a significant statistical edge and > they are often not sustained. > The opening fast moving trend often fades quite quickly as well, so > there is quite a bit at t he open to contend with. > All in all, I need to understand the risks inherent in trading the > open better and figure out ways of managing that risk before I go > there. > I am sure many traders handle it with ease and so will I once I have > the time to do the requisite homework. > > > BrianB2. > > > > > --- In amibroker@yahoogroups.com, "intermilan04" <intermilan04@> > wrote: > > > > Hi all, > > > > I'm just curious if anyone here are buying and selling securities > at > > the open with market orders, i.e. orders are placed BEFORE MARKET > OPEN > > and they get executed as soon as the market opens. > > > > I have noticed that buying at the open might help you get cheap > > shares, but the reverse is also true...you might sell your shares > at > > really bad bids. > > > > The reason why I'm bringing it up is, my system on Amibroker is > > designed to trade at the open. And strangely enough, my system > isn't > > doing too well ever since I started using it...perhaps it's because > > I'm getting bad bids and asks by placing market orders overnight? > > > > I'm not quite sure how the first trade occurs, in theory I sell to > the > > highest bidder but with low liquidity of pre-market trading, what > if > > the highest bid is absurdly low? > > > > Any thoughts on this is greatly appreciated. > > > > Regards, > > > > intermilan04 > > > Please note that this group is for discussion between users only. To get support from AmiBroker please send an e-mail directly to SUPPORT {at} amibroker.com For other support material please check also: http://www.amibroker.com/support.html Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/amibroker/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
