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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: cool who wrote (218)	5/23/1998 8:53:00 PM
From: Eric P	Read Replies (1) \| Respond to of 1729

John: <<Maximum volatility seems to occur within the first 15 min of open or within minutes of a news release becoming available. Can your program scan to pick up these stocks--alerting to incremental volumn & prices increases over a short timeframe? A quick evaluation of the trend and news seems to me to be the very important in making profits.>> Good question. Incremental volume and price increases can be a very good indication at the beginning of a good move for a stock. The program is able to scan stocks for any criteria that you select. Many traders watch for the number of trades taking place at the bid versus ask, or the direction of marketmaker movements or the direction of the S&P futures or T-bonds, etc. Maybe it would be more clear if I illustrate with an example. The following might be a trading system I might want to test: If price of Stock > price of Stock 5 minutes ago AND If price of S&P500 futures > S&P500 5 minutes ago AND If price of T-bonds > T-bonds 5 minutes ago AND If trades in Stock during last 1 minutes at ask > 75% AND If marketmaker changes UP in Stock in last 2 minutes > 60% AND If the total number of trades in Stock in last 1 minute > 15 AND If number of trades in Stock in last 1 minute > Greatest number trades in any minute in last 30 minutes AND etc., etc... THEN ==> Buy Stock using SOES The program can scan all stocks for virtually any criteria you can define. The key is to know what to ask for ==> If you know what to ask for, the computer can and will find the stocks that meet that criteria. This is where papertrading can be helpful. ==> Perhaps you should be looking at the changes in the last 1 minute? 2 min? 10 min? Heck, test them all and have the computer tell you what works best. I have been impressed how this type of scanning is able to pick up moving stocks. This past week, all of the papertrading systems initiated a BUY in Netscape at $26 1/2. Less than 10 minutes later, the stock was over $28/share. ==> I don't know the cause of the move, perhaps bad news for Microsoft. But the key is that it picked up on the increased volatility and movement and jumped aboard. Not too long ago, it was relatively easy to make money daytrading Nasdaq stocks. Now, many traders are finding it much more difficult to come out ahead. I think this automated trading platform provides a big edge in keeping ahead of the marketmakers as well as other traders. I have spent much of the past 10 months developing this software and I am looking forward to getting a return on my time investment. An earlier post mentioned that I should try to market this software to trading houses. How much do you think it would be worth to a trader to have access to a automated trading platform like this ($/trade)? For a trader with a successful system, I would think it would be invaluable in allowing him/her to leverage their system on many more stocks and with increased speed. Anyway, I would be interested in peoples thoughts with whether it would be worthwhile trying to market this software, and if so, what might it be worth to a trader. Thanks, -Eric P.S. Sorry for the long post!