Monday, November 27, 2006

Today's trades

AAPL gapped up and started running out of the gates pretty strong this morning. I thought to myself, What a way to start your morning! Little did naive ol' moi know what carnage lay ahead.

Blech... Despite being chopped out of AAPL, I wasn't ready to give up yet (even though at this point, I knew I had to get out of all of my calls that I held from last week). Aren't I a sucker for punishment? I noticed that GROW was moving up strong despite the market selloff.

Now, I know that GROW is a wild swinging stock, so I was hesitant to enter a position only to be chopped out later. So what I tried was this:
During that narrow range candle, when the price action was slow enough, I started my bid at the BestBid+1 (bestBid was at 49.13 at the time). The BestAsk at that time was about +0.40 away, which sounds like a wide spread, but typical of GROW. Of course, there's always some computerized trading automaton that matches the bestBid. (Not sure why these programmed trading computers do that, but I see that happen quite often.) So I kept bumping up my Bid by 1 until no one wanted to match me. Then I just let it sit there. Within a few minutes, I was filled !!
For stocks with wide ranging spreads, I think I will continue to try this technique.

Also, note that these particular charts were generated by using traderZBS's handy dandy chart generating tool. If you have an IB account, give it a test drive!


Tyro said...

That's a pretty clever way to shave the bid. Thanks for sharing it with us.

Phileo said...

Hi Tyro,

Yeah, I don't know how much success I will have with other stocks. This is obviously an experiment in progress - but worth a shot in my mind.

Trader ZBS said...

Glad to see ibChart.jar works for you. I am thinking some enhancement but need find time for it. Any suggestion drop me a line so I may include them in next release. but no guarantee through.