saved prospects and fill in trade opportunities

[Reginald Lin]

Hi,

I just wonder how SPACFD users handle their next trade opportunities. Here is the scenario, you need to sell one med risk trade on next day and therefore you need to find your next med risk trade opportunity ASAP according to manual. Would you do the scan on the next day for next trade opportunity or use the save prospects (you have a few saved trade opportunities) and buy it at the same day you sell your med risk trade. So you speed up your trade execution and make your money work harder. Is this right strategy?

P.S: the saved prospects I pick up meet 2 criteria

1)   no more than 5 days passed
2)   the close price on the day is equal or less than action price generated by SPA

Regards,

Reginald

[Phillip F.]

Here's my view:
Qualifier - I have no cfd's currently (too volatile) so it's just from a non cfd perspective (mind you it's one and the same anyhow without the leverage)

If I am following the default rules of spa I would use the latest generated medium signal rather than a previous one. That buy signal ideally would be in the same scan that produced your sell signal.Then, if there is more than one buy signal, the choice would be random.

Having said that you obviously have (or want to) varied the default process by your 2 criteria. I presume this would be so as you (and lots of us do) are trying to get an edge on the edge - which unless you have researched, may or may not be a good thing. If you are not into researching (and lots of us are not) then it is just an ego thing (apologies to Barry) that determines the selection. At this point the process is becoming less mechanical.

The 'right strategy' if not following the default rules of spa is like asking how long is a piece of string. The criteria you outline probably wouldn't alter the edge significantly and would be 'right' if you made it a part of your trading plan and acted on it consistently.

[David Sayer]

Hi Reginald,
Every night you should run a Portfolio scan on your open trades watch list. This can be setup as a seperate SPA3 Scan profile.

You only need to run a New Entries scan on All of the market if, and only if.....
1. The portfolio scan gave a sell, or
2. You need to fill a position closed previously that hasn't been filled yet.

The New Entries scan is run on the same night as the portfolio scan. Not the next day. This will ensure that your money is not sitting around doing nothing for that day.

In the above scenario, you don't need to look at older prospects. The trouble with using older prospects without some thought is that they may have moved significantly, either up or down. Ones that have moved up will reduce your profit, ones that move down may be very close to an exit which means your money is again sitting still. But aynthing can hapen.

So until you understand the risks completely i'd stick with current signals only.

Regards,
David

[Phil Cadman]

Hi David
Am I right, you are saying that lets suppose your portfolio allocation is full and you have no cash available, that if you get a sell signal and a scan on the same day gives you a corresponding buy to fill that position, that you sell and once sold and you have the money that you can then put on the buy order.
This of course means you have to continuously monitor the sell situation and the transaction could only happen say 1 hour before the market closes. In this scenario you have to put the buy on for only one hour and you have been involved for the whole day? Is this what you would do?
Phil

[David Sayer]

Hi Phil,
You describe 2 scenarios, both of which pertain to having no cash available in a portfolio.

Scenario 1. You close(sell) an open position BEFORE opening(buy)a new position on the same trading day.
The settlement period for trades on the ASE is 3 days, known as T+3. However, you don't have to wait 3 days to access the cash freed up from selling a position to open a new buy position. Just about every broker will include the cash from unsettled trades when determining available cash for a new buy.

This enables you to close one SPA3 trade and open a replacement on the same day.

Scenario 2. You try to open(buy) a new position BEFORE closing(sell) an open position.
Typically, you won't be allowed to do this unless you have a short term 'overdraft' facility on your trading account. So you will have to close one position before opening a new position.

You don't need to watch the market or wait all day. Simply sell and buy immediately at market value in that order. A slightly different example of this is to place the sell before the market opens using a limit order (it should get filled during the pre-market match off), then immediately place the buy order at market.

There has not been a trading day when I haven't been able to fill my positions using this approach. Sometimes we need to change our routine to get the most from the environment we trade in.

Regards,
David

[Graeme Reardon]

A slightly different example of this is to place the sell before the market opens using a limit order (it should get filled during the pre-market match off), then immediately place the buy order at market.

David, for your limit orders in the pre-market opening, do you use the signal price as per GPS?

Regards,
Graeme

[David Sayer]

Graeme,
No, the signal price is just a signal price, nothing more. It is not your target price for the next day and has very little connection to what you might expect to achieve the next day.

I place my Limit orders between 9am and 10am, before the market opens, at a price just above what I believe will be the match off. Some platforms will give you an indicative match off price but it's usually easy to estimate in your head by looking at the market depth.

Regards,
David

[Phil Cadman]

Hi David
You are confusing me with the term pre market match off. I deal with Falcon Trader and I can only look at market depth when the market is open and therefore the only figure I can use before the market opens is either the GPS  close or the Falcon trader Ask/Bid close value.
So where do I find this premarket match off.
By the way I have asked Peter from FT if they have the facility to put a market order on for a particular time say 11h00 in the morning.
phil

[David Sayer]

Hi Phil,
Before the market opens, for any stock, the order queue of buyers and sellers will often cross. That is, the highest bidders(buyers) are willing to pay more than the lowest asking(Seller) price and the visa versa; the lowest asking(seller) is willing to sell for less than the highest bidder(buyer). The instance the market opens, a volume weighted average of the orders that cross is calculated and all crossed orders are filled at that price. Hence, you are extremely likely to get filled.

Most platforms don't show an estimate of the pre-market match off. On a market maker platform you probably won't see the actual market depth until their books open, as with Falcon Trader.

I actually use a free ETrade account to see the market depth before the market opens. They don't have a pre-market match off estimate. I have to do this myself.

Regards,
David

[Xelle]

HI

Comsec have free market depth as well as pre-market match off estimate.  Keep in mind this estimate can change every minute especially as it gets closer to 10am.  Also in the pre-market match off I have seen large buy orders causing the mark off estimate to go up only to see close to 10am the same buy order to change to a sell order.  Part of the game playing of the markets.  Let the buyer/seller beware.

Injoy

Xelle