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Opening a stock position with MOC order for larger size

Discussion in 'Ask any question!' started by DevBru, Jan 25, 2019.

  1. DevBru

    DevBru New Member

    Jan 25, 2019
    Likes Received:
    I have been trading futures in the past however my interest is switching to swing trading stocks lately. More scalable and less screen time required, at least with my trading system.
    My size wont be huge from the start but i am planning to seriously increase my size once my strategy shows it is profitable in live environment. I am only trading stock with a volume of around 1M each day and up.

    Since my strategy is based on close prices all trades will be opened via MOC orders, this also gives me the opportunity to trade large size since the close trade always has huge volume. I have calculated i could go up to at least 1% of the daily volume with a MOC order without having to much of an impact on the market, however 1% is quite a lot and will not happen very soon.

    My exit's are also done via MOC orders, so there are no stops or targets in place, both for the long and short trades.
    During the backtests i have done i did not had any too large equity swings to the downside because of this, of course i could also start unloading a position if it goes hard against my position during the day.

    Most trades will last anywhere from 1 day up to 6-8 weeks maximum, depending on the momentum. Entry's are based on technical analysis only, fundamentals and earnings for example will have no impact on when i will enter a position.
    Momentum is also what my system is based on, it is a reversal system with a fixed risk reward, my average risk reward during backtests was 1:1,65 and a 75% win rate, i only close my positions on market close if the market closed above or below my mental target/stop price. I might look into a trailing stop of some kind so that i can maximize my potential profit.

    My average target in a stock is around 5%-10% or more, most of the time somewhere around 10% movement, so a few cent slippage more or less shouldn't be a problem, right? If i get in higher than anticipated my intended target and stop will be further away and if i get filled cheaper than anticipated my intended target and stop will be closer. I only calculate my desired target and stop after i know my fill price, since my trade is with the direction of the movement/reversal a few cents more or less will not impact my system that much.

    An example, my system gave me a long for FB on december 26th, closing price was $134,18 and after my MOC should have been submitted price rose another 0,53%. This didn't have any impact on my system/trade signal at all, even if the price would have dropped 1% the buy would still be valid. The target in this specific trade is 12,6%. My trade is always withing the direction of the day and a large pullback in the last 15 minutes is rather unique, no?

    Very keen on hearing some opinions from more experienced traders regarding these MOC orders and the fact that i will not be using fixed stops. What do you guy's think of such a trading system?

    All advice and tips will be very much appreciated since stocks are completely new for me!

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