DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Rick Faurot who wrote (1016)	6/19/1999 2:28:00 PM
From: Paul Viapiano	Read Replies (1) of 18137

Here's my trick for trading gap opens on Datek... When I see a stock gapping big, say it closed at 19 and it's indicated at 25 x 25 1/8, I place an order about 2-5 minutes before the bell for a sale at 24 1/2-ish, which is essentially a marketable limit order. Sometimes it gets executed before the bell (among Island customers I guess) and many times I'll get the 25 price. However, just in case the bids fall out immediately the 24 1/2 limit order helps protect me. I sometimes use this method in getting out of a very fast moving internet stock intraday (in which I may be up 4-10 points) if I didn't already have a sell stop into strength in place. If I'm lucky enough to catch one of those beautiful runs I'll trail the price by about 1/2 point and when I see the Level 2 start to poop out I'll hit the order button immediately. Most of the time I'll get a fill 3/8 better than my limit order. Hope this helps... Paul PS...Since dealing with an internet-access broker is slower than a dedicated -line or a day trading center setup, I use the above methods to help make up for the slower response. It's not a bad way to train yourself for "anticipation"...just like catching the exact moment of pullback intraday and getting in rhythm with the breathing of the stock and watching your levels. Another great way of training yourself this way is to watch some big MMs like GSCO work on AMZN and seeing where they are "anticipating" where the levels will be. You can make some great money and learn a lot just by shadowing him all day and stepping in front sometimes. I did this the last couple of days with AMZN. When GSCO drops out of the "inside loop" of bid/ask, take a look where he retreats to, say, way down lower on the bid side. Look at your chart...sure enough, back to some earlier intraday support. Damed if it doesn't head down there shortly thereafter and reverse from there after he's had his fill. When he's higher on the ask, it's usually earlier resistance or an intraday moving average line. Sometimes they refresh and all of a sudden come up to the current bid (or ask) and keep buying (or selling), pushing it higher (or lower). Great things to look for and to help usunderstand the dynamics of intraday pricing.

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