jeremyjohnolson

Haha, thanks Anthony! I haven’t been swing trading, just day trading. I am asking about this though because I was granted stock options of $KNX at work, as an employee, it was compensation they gave me because I am a Tax Director at Knight-Swift Transportation and I am trying to decide when to execute those options. I posted it here in the swing trading section because I feel like it is more of a swing trade type question.

I haven't been around too long, but I have been here long enough to see several instances of buy the rumor sell the news play out in real life, so I know it is a valid concept that truly happens. I think most people know what I mean when I say that, but just in case some don't what I mean is, for example, a stock is about to have earnings release or some other event happen and there is anticipation leading up to that event that it might be really good, so people buy the stock and run it up leading up to the event. Then the event happens and unless it even far surpasses the best and highest expectations, often times it will sell off after the event happens. So my question is, does this same thing happen when the good news event is the possible passage of a piece of legislation? Does anyone know? Specifically, I am looking at the transportation bill and I have noticed that my company's stock ($KNX) in which I have stock options I can exercise (trying to decide best time to exercise) tends to go up whenever there is positive news that the transportation bill might pass, and pulls back a bit when it is looking less likely to pass. So my question is, is this a buy the rumor sell the news kind of thing where after it finally does pass, the stock might sell off some? Or is this different? I think it might be different because for events such as earnings, there are so many unknowns whereas with the transportation bill, at this point, there are not a whole lot of unknowns other than will the House pass it or not and then it finally get signed by the President. So it seems in this case, once it actually gets signed, the stock should go up because now it is known that roads and bridges will be improved thus helping the transportation industry to operate more efficiently. Right now it's trading higher only on the hopes that it might pass, so it seems once it is known and it is signed into law, we should see a pop, any thoughts? If we see a pop, then I want to wait until after it is signed to exercise my options (assuming it gets passed). If this is a buy the rumor sell the news phenomenon, then I should exercise now before it passes.

It really sucks because something just came up and I can't make it on the 7th. Have fun! Wish I could be there!

I will be there. Looking forward to it! I won't be doing any drinking though, so I will leave the venue choice up to you all.

Hi Kyle, I believe you are correct in identifying the problem on my trade as the stop being set at or very near the entry price, but what is strange is that's not what I did. So I do not know why the software or hotkey set the stop at my entry price when that's not what I instructed it to do when I clicked $28.11 to be my stop. I just went back and re-watched the video I saved of this trade and it seems clear to me that I clicked the correct stop level at $28.11. I can even see $28.11 being loaded into the price field of the montage when I double clicked the chart to set that as my stop. But then when I hit the hot key to enter the trade, for some reason it set my stop not at the $28.11 which I clicked previously but instead at the same as my entry price. I have no idea why this would happen. Normally the hotkey and DAS software do not behave in this way for me, it normally works as expected, so I am not too worried about it. I will just chalk it up to some unknown fluke, unless it keeps happening, then I will have to do more digging to try and figure out what's going on. I am not totally writing off the possibility it could be user error (i.e. something I accidentally did, without knowing, which caused it), but it seems unlikely to me since I can clearly see on the video my stop being clicked and loaded, then entering the trade and I didn't click anything else in between those steps, at least not to my knowledge, but who knows, maybe I did. Like I said, I will just write this one off and see if it happens again. That being said, it did happen to me twice already, but again, it still could be user error, so I will just be extra careful and see if it stops happening.

Hey BBT community, I need help! I am using the fixed dollar risk hot key from Kyle (thanks Kyle!) where I double click the chart to add where I want to put my stop and it auto calcs the shares. I had a very odd thing happen to me two days in a row. After double clicking the chart to set my stop and then hitting the hotkey button on my StreamDeck to execute, DAS immediately bought the shares and then immediately stopped me out and sold them at market in less than 1 second. I recorded the trade this morning, so I was able to take screen shots to show how the problem looked in real time in DAS (see below). Does anybody have a clue why this is happening??? Another very odd thing about it all, this problem has only happened to me twice, once yesterday morning, and then again this morning and I have been using this hotkey for nearly 1 year now without ever having had this problem in the past. On both occasions the problem only happened on the very first trade of the morning, when trying to go long on a 1 min ORB. Both mornings I continued to trade immediately afterward utilizing the exact same hotkey without any issue. So apparently it only happens on my first trade of the day right at market open. Another thing, if I calculate the dollar amount the hotkey risked, I am coming up with $13.78 (price 28.24, stop 28.11, risk 0.13 X 106 shares = $13.78), but it should have only risked $8. Normally the hotkey risks the correct amount, so I do not know why it would have risked too much this time. The hotkey next to that one will risk $16. Potentially I could have clicked the wrong hotkey and said to risk $16, but I serious doubt it as I am always very careful to only risk $8 on the 1 min ORB since I am still in the "testing it out/learning" phase. Someday I will risk hundreds, even thousands :), but that day is not today. So even if I clicked the wrong key, it still wasn't risking the right amount as it was only $13.78, not $16 (or $8). I don't know, the price action was pretty fast, so I chalk it up to that somehow getting a bad fill or something like that. I am more concerned about my first question of why it is immediately stopping me out. If there is anyone that can help me diagnose this problem, I would greatly appreciate it! Let me know if there is any more information you would like to know and if I can I will provide it. Here is the script I used: FocusWindow M1;ACCOUNT=my account number goes here, deleted for privacy;CXL ALLSYMB;StopPrice=Price-0.01;DefShare=BP*0.97;Price=Ask-Price+0.01;SShare=8/Price;Share=DefShare-SShare;DefShare=DefShare+SShare;SShare=Share;Sshare=DefShare-SShare;Share=0.5*SShare;TogSShare;ROUTE=SMRTL;Price= Ask+0.05;TIF=DAY+;BUY=Send;DefShare=1;TriggerOrder=RT:STOP STOPTYPE:MARKET PX:StopPrice-0.1 ACT:SELL STOPPRICE:StopPrice QTY:Pos TIF:DAY+

No worries. Good luck to you!

Yes, I will be there. See you soon!

5.6.4.2 It says I have the latest version.

Are you sure that is right? It's not how DAS is behaving for me. I loaded that hotkey you gave me, Price=1.00; SShare=BP, and this is what I get. Here are two examples: First is $DIS where the DAS shows 25%/25% and I am getting $123,675 BP: Second is $AMC where the DAS shows 100%/25% and I am getting $30,918 BP:

Thanks Kyle, I think I am just going to switch to using fixed dollar risk, at least for now, and update the dollar amounts as my portfolio balance changes in order to get the same result as using % of equity. Also, it's a little counter intuitive, but I was told in chat last Monday by Bryan W that when it says "LongMargRate: 100%" that actually means you have to have 100% of cash for the position. At first I thought that it was the short side that was limiting me where it says "ShortMargRate: 25%" but it is actually the other way around. Under normal circumstances both LongMargRate and ShortMargRate should say 25% if your leverage is 4:1. I think what they are getting at in that alert screen is giving you the % of your total position which you must have in cash. So 100% margin rate means you must own 100% of the position in cash, whereas 25% margin rate means that you only need to have the cash for 25% of the position, or, in other words, 4:1 margin. I confirmed that Bryan W is correct about this. Here is an example of what I see on ticker $AAPL today which allows me to use my full 4:1 margin (I know $AAPL is not limited because I traded it today, plus, well, it's Apple )

Thanks for these hotkeys Kyle, they are awesome! Something I have realized is that when a symbol is restricted by IB to not allow using margin (like shown in the screen shot where it says long margin rate is 100% - that means you cannot use margin), then DAS trader calculates my buying power as only my cash balance because for that symbol, that's all it truly is, I don't get margin. Then when I use the dynamic hot key to risk a % of my balance, I end up only getting 1/4th of the amount of shares I would expect. I spent the better portion of today digesting the code in the dynamic hotkeys to try to figure out what's happening and I finally get it! (It was quite an achievement LOL!) I just don't know how to fix my problem here. Actually, I think it probably cannot be fixed, but before I give up, I wanted to pose the question to the community and see if there is something I am missing or if somebody might be able to come up with a very creative solution which I have not thought of yet. So the script compares the total amount of shares you can afford based on buying power to the total shares you can buy based on your selected stop price and how much you want to risk losing if the trade goes against you, then sends a buy order to market for the lesser of these two amount of shares (genius script Kyle! Took me a whole day's effort just to understand it LOL!). The problem I am having is when DAS sees my buying power as $30K instead of $120K because of the limitation as shown in the screen shot attached (IB does not allow margin, only cash on certain symbols on certain days), then the first part of the equation (shares based on BP) calculates fine, but the second part (amount based on desired risk level) gets incorrectly limited to 1/4th of what it should be and the shares that get sent is this lower amount. This is because of the part of the equation where it says, "Share=DefShare*0.25*Price*0.01" (assuming I want to risk 1% of my portfolio balance), comes up with a much lower number than it should since DefShare was just set to "BP*.97" in the previous line of code and now it's being divided in a quarter again and in this instance BP was only $30K (normally it is $120K) which was equal to my cash balance, not my cash balance times 4. In essence, in this particular scenario, the script should not multiply DefShare*0.25, that is where it goes wrong and this is why I end up only buying 1/4 of the amount of shares I should have gotten. But in all other normal cases, i.e. when margin is allowed by IB, it has to multiply DefShare*0.25 or you would be getting 4x the amount you want, which would be really bad. I do not think there is a way to fix this automatically. I think the only options are to either have two sets of hotkeys, one where it doesn't cut DefShare in 1/4 and another where it does. Then I would just have to be sure and use the right set of hotkeys depending on if margin is allowed or not. Or, the other alternative would be to not use the % of risk hotkey at all, but rather go to the fixed dollar risk hotkey and just update the amounts to manually calculate the % of my portfolio balance as my account balance changes. Is there any other way around this that I might be missing? Is there a way to continue using the % of risk hotkey and somehow have it not cut my shares in 1/4 size when the symbol is limited to cash only but I still have enough buying power? To be clear, I am not talking about a situation where I do not have enough buying power. Let me put some numbers to this to illustrate: I want to risk 1% of my portfolio balance when buying a stock that is selling for $20 with a stop loss of $19.80, with all the cushions and what not in place, that would get me 1,372 shares which would cost $27,437, so I have enough cash to buy it. But the hotkey only gets me 1/4 of 1,372 shares, or 343 because of the equation "Share=DefShare*0.25*Price*0.01" which in this instance = $72. $72 is then used as the risk based loss (instead of 4x that amount which would be $288) and at a loss of $0.21/share I can only buy 343 shares in order to lose $72. It then compares the calculated 343 shares to the max shares I can afford, which would be 1,455 and sends the lesser of the two, 343 shares when what I really wanted to buy was 1,372 shares which would have risked $288 (0.21 X 1,372 = 288).

Thanks Upendra, I hope you can make it!

How does Chipotle sound at: 9301 E Shea Blvd Ste 102, Scottsdale, AZ 85260 We could meet there at 11:30 on 3/11, if that works.

Sounds good! About what area will you be coming from? We could pick a central location. My major cross roads are 67th Ave & Happy Valley.

We could get together for lunch on either Wed or Thurs if that works.

Anybody in Phoenix, AZ area want to get together for dinner and talk about trading, share ideas, etc...?

I agree that the biggest challenge standing in the way of success in trading is my own psychology. Like I have said previously, I still consider myself a novice, but even I have been doing this long enough to be able to say I know from personal experience that you are 100% correct in saying that trading is much more about psychology than analytics.

Thanks Martin. I was humbled by the market today and reminded that I am glad I am still in sim. I think I will just go back to the basics for now. I am still doing well with the 1 & 5 min ORBs, I will just keep focusing on those for now and forget this "scalp" idea. The more I think about it, if I am honest with myself, I think the "scalp" idea was more of a way to add something to my trade book that would give me permission to basically do whatever the heck I want lol and it didn't work out so well today!

Here is a losing trade where I tried to get part of the move of a 5 min ORB (breakdown) but got stopped out. Again, the reason I am calling this a scalp and not a 5 min ORB is because normally I would have taken a smaller position and my stop would have been closer to VWAP (the blue line). Maybe this should just be classified as a 5 min ORB though.

Here's one on BABA. It was called out in the room and it was already very extended. So that's why I got in for just a small scalp at the top of the move not expecting it to go much more. I would say this one was chasing and probably not a good trade even though it did work out for me this time. If you look at the 1 min candle chart you can see I did at least get in on a small pull back.

Here's another one I took on BA on the same day. These are 1 min candles. It was reversing from a 5 min ORB break up and coming down. I don't know if "trending" is correct or not since it was so short a time, but that's what I called it.

Here is one I took on BA. I put this under "Scalp" instead of 15m ORB because a normal 15 min ORB I would not have taken as large a position and my stop would have probably been around $220.

Yeah, I updated my post. I went back and looked at Chartlog after posting that to see what they really were. 80% is actually too high for the 1, 5, & 15min ORB. I have only been doing scalps like this and tracking for 2 days, so not really enough to have stable stats on the scalp idea yet. I put what my actual stats are in an edit (see my post above).

Peter B and Martin D, thanks for the helpful advice. It truly is much appreciated. Martin, I totally agree with your point about only doing this with a highly liquid stock (no low float) for the very reasons you mentioned. I had actually already had the same thoughts. Also, I did not think of this idea because other strategies are not working for me. I was just noticing that even when the strategies fail, I still move into the green if even for just a moment and that's what made me think of this because I could do it on all trades and get a good return on the first little movement about 90% of the time, I suspect, and if I have to take a relatively larger loss on that large chunk of shares only 10% of the time, well, then it might still be worth it. I don't know. Here are my stats so far on the 1, 5, & 15 min ORBs which are the only strategies I have been trying to learn and test out lately. I started trading these, and journaling all my trades, on 10/26/2020. Since then on the 1 min ORB I have had a 63% win rate over 48 trades with a profit factor of 1.69 (PF could be better, but still, not too bad, not losing) I take about 1 of these trades a day at the open. On the 5 min ORB I have had a win rate of 70% with a profit factor of 2.19 over 47 positions, again, I usually take about 1 of these a day at the open. Overall I haven't done as well with the 15 min ORB with a win rate of 49% and profit factor of only 0.93 over 37 positions. But for the last 26 of those 37 I changed up the way I was looking at the 15 min ORB, I started giving it more room and taking a smaller position size, since then my profit factor has increased to 1.29 (still not great) and my win rate has been 58% over those 26 trades. Also, if you are curious, I have only been trying this "scalp" trade for 2 trading days so far (I haven't traded this week yet because of getting COVID and personal things going on at home getting in the way). Over 2 days, naturally due to the nature of this "strategy" (or maybe "method" would be a better word) I have taken a lot more trades than 1 a day, in fact over 2 days I took 37 positions. Over those 37 I have had an 81% win rate and a 1.28 profit factor (remember, my profit target and stop are a lot tighter). I think that even though I took 37 positions, since it was only over 2 days time, I still need more trades (more days) to be able to truly say it's stable and working. I think I need to do this for weeks, probably months before I can start to make the assertion that it is working and before my win rate and profit factor start to stabilize into what they really are. It's possible to just get lucky for a couple days. Even a couple months isn't that much time, but it's better than a couple days. I am going to try it because I do not have to stop doing the normal 1 & 5 min ORBs in order to try (at this point only in sim of course), I just have to add an extra interim step. If it fails, then oh well, at least I will know. But yes, definitely, something like this, taking a large position for a small move, would definitely have to be only done in a very liquid stock and not a small cap stock for sure. I would only do it in a stock where the likelihood of it being halted or making really fast really big swings is very small, approaching zero likelihood.