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Daytrading the SPY or QQQ...?

  1. Has anyone figured out a way to profitably daytrade the index stocks? Anything wold be helpful. Technical analysis.. any software (such as Trade Station)... anything to help me trade them profitablly. Im not looking for big moves or big profits - I want to make just enough to cover my commission. Anyone?
     
  2. DayTraderNYC,

    You can daytrade Emini S&P 500 (ES) and Nasdaq 100 futures(NQ) instead. ES = 500 SPY ; NQ = 800 QQQ.

    Benefits: Lower commissions, lower margin, more liquidity, less partial fills, tighter spreads, longer trading hours (almost 24/7), electronic execution, no middleman (Market makers etc.), unfragmented market - no routing issues, no minimum $25k daytrading requirement, no additional expenses when shorting etc...

    For example: one can daytrade 1 NQ (= 800 QQQ) , with only $1500 daytrading margin and $2.40 commission or less. While daytrading the same, through 800 QQQ, one will need at least $6000 margin and will pay usually over $6.50 in commissions.

    To sum up, it's more efficient to daytrade Emini futures NQ and ES then the corresponding QQQ and SPY.
    Many daytrade NQ and ES for a living, hence they've found a way to trade them profitably.

    Fohat
     
  3. Trading these futures is not a possibility for me since my firm does not allow futures trading. Only equities. Im just interested in learning a method to trade the SPY or QQQ's intra day. SOMEbody must be making a living doing this??
     
  4. I suspect that you will be less than pleased with the answer, but anyone who understands how to trade is able to walk away with profits.

    The answer is not in a particular software, or book, but in an understanding of yourself and the markets.

    No one can provide that in a short reply on a message board.
     
  5. I am constantly amazed at how naive people are. No offense intended Daytrader but your question, rephrased is :" Can somebody please tell me an easy way to make a bunch of money?" If you put your question like that would you expect a serious answer?
     
  6. LOL...No..Im not looking for the holy grail. I do fine without the help of others as far as trading is concerned. All I was looking for was any hints others might be able to provide in trading these particular stocks...SPY and QQQ...not on trading in general.

    For example, someone suggested that I keep the list of top 10 stocks that make up those indices and perhaps that might give me a heads up. Someone else told me that he trades the SPY based on fast and slow stochastics and when one crosses the other..blah blah blah (Im not a techie so I will have to do some reading into it). Another trader who trade QQQ has told me that he uses TradeStation to look for buy and sell sginals and that it has worked very well for him. Still another had told me that he uses SPY and QQQ only when there is a major news that impacts the markets and moves the markets. These are the types of suggestions I was looking for. Nothing wrong with that ...is there? Hopefully this posting will help someone who was seeking the same things as I was. Im simply looking for more from those who are willing to share their knowledge without giving away the farm.
     
  7. the SPY pretty much replicates the futures contracts - so it does not act like a normal stock - so if u cant make money at stocks - you can forget about making money on the SPY

    the easy way to learn is to get a magic wand - but i hear that the guarantees on those things are not up to much!

    so maybe u might try what everyone else does and spend a lot of time learning - and then you can make money - funny old thing - experience - it has to be earned - it aint given
     
  8. Easyrider what a peculiar answer you're come up with here to a very legitamate question??I'd like some info on this subject too. If you feel this way what's your reason chatting on ET??
     
  9. Limbo

    The question was, unless I am missing something, "Can anyone tell me how to trade the index stocks profitably?" I am sorry but this type of question cracks me up. From day one I never expected anyone to tell me how to trade stocks profitably. If you sit down at a poker table and ask them guys to teach you to play poker they will certainly oblige you.
     
  10. The reason I frequent this board is because there is lots of useful information re: brokers, software, hardware, etc. Also a good laugh now and then.
     
  11. I'm glad you're getting your yuks.
     
  12. try to keep a daily record of where the indicators

    such as $TICK , SOX , Dow Jones are when the SPY and QQQ

    make their daily ranges

    Also note how often prices seem to gravitate to the big #'s

    00 , 25 , 50 , 75 100 etc intraday

    also consider how the $dollar , Bonds , Gold , Oil is doing intraday

    also note the overnight ranges in the futures SP +ND

    also try to come up with a projected
    daily range and perhaps scale in and out of those parameters

    also note if one of the above is strong or weak relative to the other one intraday

    hope this helps a little bit

    good luck ... its not easy
     
  13. DayTraderNYC,

    If your having trouble making a profit in the QQQ...why don't you tell all here your trading methodology and ask for tips on improving what your already doing.

    Your question sounds like your looking to abandon what your already doing and pick up something new.

    Simply, spend more time examining what your already applying and get help on improving it.

    Your question the way it stands will bring out the jokes or non-serious replies (as you already have notice) and soon there]ll be offers or suggestions for you to try a service.

    Also, if you say you don't really have a trading methodology...than you shouldn't be trading.

    Good night all.

    Nihaba Ashi
     
  14. I seem to have offended Limbo whom I respect so I must be doing something wrong. Nobody can make more mistakes or do anything dumber than I have done in my quest to learn to trade.
     
  15. Yes I have found a way to trade the QQQ for a + $ or two. Anyone have a longer + stint 12/13 might be my best.
     
  16. Easy-again-thanks for your sensitivity here--and bigger thanks for your respect. You're a good man--all is well--limbo
     
  17. No gary you're the best--do u want to give us a hint--a view into your process--otherwise--why the f--k post--this is pure self-aggrandizement.
     
  18. i definetly get that the point of these forums is to help each other out - but i think anyone who just asks "how do i make money from trading xyz?" - needs to be told that there is no way that anyone is going to answer that question, or even be able to on a forum

    they may get "help" from someone who is a theoretical trader - but asking what sounds like such a naive question is just not going to elicit a valuable reply

    but learning something about trading and targeting a specific point and then asking questions - will more than likely get some very valuable replies

    there is no one way to trade - no one style - and everyone has different profit objectives - so there is no one aswer - but if u keep trying and keep learning - if you have trading skill - you will develop and make money with your own style
     
  19. What I think is neat about Index trading is that one merely(ha!) need figure out the psychology of the general list. i.e. Is the market fixated on oil prices or earnings ect. Also by their very nature indices IMO are a better technical trade. They have less volatility then any single component, and best of all if I'm bullish the market, I don't have to worry that the biggest long I have, will be that 1 in 4 issue that closes lower on a big up day because of some asinine downgrade that should have come 2 years ago.
     
  20. Am I missing something here? Has DTNYC done something out of the ordinary? In one way or another we're all(many)are asking "how to". Seth has provided his procedures-perfect response--plus he adds "hope this helps-good luck". Nihaba does well by saying "tell us what you're doing now" so we can help. Tampa provides nothing. Fohat tries to help suggusting another-better- method-NQ/ES.. Stevet I dont think DTNYC has asked a naive Q at all. The answer is nobody wants to give their "marvelous" methods away-fearing devulging will ruin it. It's a joke-a goof-like it's gonna matter--especially on a 50-100k vol. stox/index-whatever. Look up gnp in the archives and see how Praetorian2 has outlined a system he has found to work for all of us to see. The real folks who have found methods are proud to put them out there to help-for all to see-- not afraid because they know the masses will not be able to execute properly anyway.
     
  21. limbo

    why do u think people are afraid to give out their wining systems or methodolgy in case it then stops to work?

    i dont think thats the case at all - although broadcasting a currently working arbitrage opportunity would probably kill it - i think telling someone your technique in trading indexes would probably, if anything, add to the technique, since it may add momentum to the begining of the move to get it going

    whats your exact methodology and annual return%?
     
  22. Stevet that's my question-you tell me why??For me trading the q's I buy at support areas and sell at resistence areas-trading off the 5 and 15 min charts and looking at the 15 and 60 min charts for s/r-while paying attention to various moving averages- trading off the 5 and 15 min charts I watch the 20 sma on the 5-15-60 min. charts. Nothing terrific which is why Im involved in this thread in the first place. My #'s are my business.
     
  23. DTNYC,

    Try www.vtoreport.com They have a strategy there where you buy the QQQ when the NDX 5day RSI goes below 30 and sell when the NDX 5 day goes above 50. This method has a gain of 193% over the last 6 years which is a 12 - 13% compounded annually return.

    This isn't daytrading, but with a little tweaking the return could be improved ie margin, shorting, etc.

    This strategy is published on the net for all to see.

    Ed:) :)
     
  24. What I have found from many that try to trade the QQQ is that tier approach is wrong. You must look for things that are not obvious and that may break many fundamental trading rules. To give you a heads up without giving you my personal trading system what I can do is tell what does not work. ( or at least what works less frequently )

    1. Short term breakouts against longerterm trends. Like playing a range break on a 5 minute chart right into 15 minute resistance.

    2. Going with trend when it is extended intraday. Shorting lows late in the day on a strong down day may get a few ticks but is not the best strategy.

    3. Trading the first 30 or last 30 minutes of the day. My personal performance is weak during these periods, I do far better between the hours of 10am and 3pm when moves are slower and trading less erratic.

    4. Overtrading is a killer. If you are looking for moves greater than .15 from entry I find there are only 3-4 trades a day that offer good setup entries and little wiggle.

    To sum up, I have found that in trading the indices it as much about what NOT to do as it is about what you actually do.

    AllenZ
     
  25. The guy asked "HOW?" 90% of the response is very watered down, theoretical, general stuff. Where's the specific TA techniques that he asked for? Yea, well that's just what happens (most of the time) when someone asks a direct how question. People start beating around the bush rather than discussing actual techniques.
     
  26. IMO, DAY trading the qqq or spy is a little too difficult for a few reasons.
    1) the range is small....so to make good $ intraday you need to move some decent size, and if you're at a pro firm and you're paying per share you're already at a disadvantage
    2)everybody is trading them...which again makes the range small
    3)the range is too small :)

    daytraderNYC, if you really want to daytrade the index..open a futures account...if your firm won't let you..find a way
    or you can find a nas stock that follows the qqq..that offers a bigger range...and if you want you can ofset the vol with an opposite pos in the qqq.....some stox that have a wider range and correlate well are xlnx or qlgc

    or you can swing 'em in a different acct...or maybe your firm will let you
     
  27. Hey, daytradernyc I wish I could offer you some help on this one. Unfortunately, I do not daytrade. I recently met you in an AOL Chatroom and you were quite helpful in explaining and clarifying your trading. Hopefully, the same kindness will be returned to you.:)

    I think these guys think you are some inexperienced newbie. The fact of the matter, as you already know, is that a very great majority here do not have the answer and do not trade successfully. As a result, they post negatively. Hopefully, you did not get offended.

    good luck and have continued profits dude.
     
  28. P.S. Glad to see you here. Continue visiting. I know you have a lot to offer.:cool:
     
  29. To all who have posted anything useful in this thread...I thank you. I have already gotten more out of this question than I had anticipated. For those of you who thought it was a silly question to ask, I guess you won't get anything out of the postings here. Your loss.

    As Trader101 mentioned, I have a very very specific method I use profitably everyday. Suffice it to say, Ive been at this for 3 years and make a comfortable living. I very rarely trade the index stocks but have come to realize that I may be able to use it to my advantage because of soemthing that happened at my firm recently (which is not important to post here).

    The small range is not a hinderance to me... All Im interested is not losing any money...I dont care if i can just cover my commission. My interest in trading the SPY or QQQ is to (I know some of you are going to cringe at this) pump up my volume to cut my rates..but not at the expense of losing money by trading these. As of right now, I can trade up to 10,000 shares of SPY or QQQ or DIA. 10 round trips adds up to 10K x 2 x 10 = 200,000 shares a day + other stocks I would trade. That could add up to 300,000 to 400,000 as an average daily volume which would command lower rates from my firm. My money would be made by trading other stocks... my usual method. SPY or QQ is just there to increase my volume. That's enough to lower my rates on everything I do (bullets and regular commission) and increase my payout which would be worth it for me in the end. But , again, I do not want to lose money in the process. As long as I can break even, thats all that matters to me at this time.

    Agaion, thanks for the various input - they will all help me.
     
  30. Are you saying you try to figure out the current market fixation and that helps in your index trading? Care to elaborate?
     
  31. Honestly it sounds like a lot of extra effort to move that much volume for such little reward. Your other strategy will probably suffer at least a little. My first advice would be to see if any other reputable firms would give you the rate you want without all this extra trouble...it can't hurt to ask.

    Then if you must do this volume strategy maybe you could use some sort of pairs strategy with QQQ and SPY. Use the standard deviations of the spread range and put on large positions on each side. You could rack up huge volume and be hedged against systematic risk at the same time. Being profitable would take some work...but this was the best idea I could think of.
     
  32. Dustin......GREAT SUGGESTION!
    I think between SPY, QQQ and DIA.... I should be able to hedge 2 positions and risk very little....Thanks for the idea dude!!! Im not sure if any other index stocks will work because of lack of voulme..Anyone know of others that I could use?
     
  33. there is nothing new under the sun. you must be a moron if you believe otherwise. DUH!! :-/
     
  34. Becareful! This sounds like a Texas hedge!!! The indexes are correlated but not all the time. You don't want to be caught with a big "hedged" position when they diverge and go the opposite way.
     
  35. DTNYC,

    Use the search button (upper right corner) here at EliteTrader to review past messages on SPY or QQQ strategies to see what was previously posted.

    I believe what you are looking for has already been discussed..."strategies being used for trading SPY or QQQ".

    Nihaba Ashi
     
  36. DTNYC,

    I'm a little confused by the post above by you.

    If you ALREADY HAVE PROFITABLE STRATEGIES for trading whatever it is your currently trading...

    why don't you test your already proven strategies on SPY or QQQ?

    If you have and they don't work well...then I undertand (a little) why your asking your questions as so many others that come to ET.

    If you have not tried your current trading methodolgy on SPY and QQQ (what's already working for you and makes you enough money to make a living)...test them first and I highly suggest this to you before you listen to a bunch of anonymous usernames.

    Also, I disagree with Trader101 comments that "The fact of the matter, as you already know, is that a very great majority here do not have the answer and do not trade successfully."

    I don't know if it's FACT (I'm curious where Trader101 got his/hers stats from)...but I have a feeling that the great majority here realize that their success is based on their experience, intuition, psychology of the markets and psychology of themselves and a little luck...

    more weight on psychology of themselves as the tool to profits.

    Thus, for a poster to write a few paragraphs of exactly how they do it for profits...Is a little absurb to think their answers will be profitable to you...

    especially when you already have a profitable system.

    For example, what if someone posted a general answer to compliment your general question about strategies...Answer: "sell or short at overbought...cover or buy at oversold".

    Of course such a suggestion will cause more losses than winners and of course they're doing something additional that most likely can't be explained in a few forum threads...let alone in a few paragraphs.

    I'm just amazed at how many people come here asking for something that probably requires a mentor (one on one education) and expect to find it among many market veterans that most likely will agree with me than disagree...arguably.

    Get a mentor and it'll be money well spent...much better than trading books and much better than answers from usernames.

    Note: I'm not saying that mentorship is the best method...just at the top of my list.

    Nihaba Ashi
     
  37. i have to say i'm a bit confused too. the thread starts off asking how to trade the qqq,spy...now you're saying you don't care if you make $ or not..you just want it for your volume? why not just up the volume on your current strategy...on your current stox?
    I mentioned the hedge in my first post...but why not do more pairs trading.....pro firms have always suggested thats a good way to increase commissions..I mean lower your risk. :)
     
  38. First, the strategies I use for other stocks do not work at all for index stocks. I traded basically news stock at the open. Thats my bread and butter strategy... and Im what you might call a "tape reader". Try reading tape of SPY or QQQ. Simply does not apply.

    Why am I interested in increasing my volume? To have my commissions lowered. Why is that so important? Look at the following figures and you'll understand:

    If my current commission is 0.0075 (avg daily volume of mininmum 100,000 shares, let's say), that adds up to $750. If the rate goes down to $0.0065, that adds up to $650. $100 x 250 = $25,000 a year. Can I get 0.0065? If my volume is 400,000 a day for a couple of months....Im sure they will consider it. Those are the minimum figures. As my rates go lower, Im sure my volume will increase as well. Perhaps for most of you, commission rate is not important...but it is important enugh for me to consider these strategies. After taxes, this is my second biggest expense to my business.
     
  39. daytradernyc-
    i understand what you're saying..and I'm with a pro firm and doing this for a living so I too know the importance of cost. It just seems like a risky strategy for commission savings.
    in my experience, trying to make a cut in cost by increasing volume is usually a losing proposition. that why i say, if you have a good strategy...increase that size..or review your trades and maybe you'll find that you leave $ on the table
    but if you think using the qqq's will work..maybe you can just envelope them or constantly get on the inside..
    good luck.
    and as far as 'tape reading" the qqq's etc..yeah I know...sometimes I'll remove the ecn's..they take out some noise...and the spy and dia are a bit slower.

    P.S. I just read on another thread that you're at worldco...well my understanding is that unless you have nasdaq clearnce you can't use the ecn's anyway...and in that case i think that increases the risk in this idea even further.
     
  40. "Try www.vtoreport.com They have a strategy there where you buy the QQQ when the NDX 5day RSI goes below 30 and sell when the NDX 5 day goes above 50. This method has a gain of 193% over the last 6 years which is a 12 - 13% compounded annually return. "

    If you did it this time you'd be down 20% + right now???
     
  41. Daytrader,

    Someone may have already suggested this but I didn't have time to review the whole thread. The NDX or QQQ is highly correlated to certain components, principally the $SOX, the semiconductor index. The corresponding holder is the SMH. There are a couple of other components that correlate pretty well too. Given your objective, what I would do is take a directional trade with the holder, eg. the SMH, and hedge it with the QQQ's. You will have to work out the ratio, based on the relative beta's. I think you could generate huge volume with little risk this way and also position yourself for a big intraday directional trade if you decide to lift the hedge.
     
  42. hey, just read throught the thread and didn't see any positive comments on how to short term trade the spy's qqq's or otherwise.

    1) need a penny broker, who discounts even further on volume (i.e. max comm amount)

    2) need high speed connection, ruling out
    a) sat comm
    b) 56kb modems
    c) fractional t1's

    3) need dual monitors with charting watching the futures (of your choice), indexes and chief components with those indexes

    4) reliable broker that you have no problems with, and are satisfied to now ramp up trading with

    stay tuned for other traders to answer the rest...
     
  43. Does anyone use a mechanical system to trade the SPY or QQQ's?
    JJ
     
  44. Yes.
     
  45. You can use the search button in the upper right corner for results of something like "Mechanical System QQQ"...or "Mechanical System SPY".

    Here's the link of search results of "Mechanical System QQQ"...

    http://www.elitetrader.com/vb/searc...id=31605&sortby=lastpost&sortorder=descending

    Nihaba Ashi
     
  46. egildone,

    As of this time you have made a total of 5 posts at Elite, and on 4 of them you've discussed the same website. Hmmm. Maybe you're just so thrilled you found that site that you want to share it with the world....or maybe you have an agenda? :eek:
     
  47. Yes, the NQ emini (QQQ future contract). Much cheaper than trading qqq's commission wise. I just recently started using my stock system on the emini's and it works great so far. My system uses S/R and probabilities to buy and sell. I've found it interesting that the same stats exist intraday with my system as they do on multiday trades (Win/Loss ratio and Average profit vs. Average Loss).

    Borrowing from George Angell's method of reporting projected future performance, I should be a millionaire in a few months! But in reality on a good trend day it makes a killing and on a consolidation day it gives a lot back. Luckily there's a mixture of both every day. I can't trade using discretion. I have to have hard paper results and real life testing before I commit real money.
     
  48. Arbitrage? Who here has been talking about arbitrage? I haven't seen any... just "daytrading".
     
  49. I just read this whole thread....and didn't find an answer to the question I was looking for.

    You guys that trade the ETF's. What is the best way to get an execution. I don't have access to futures, but I seem to really excel at reading them. However the proxy's I have used for them in the past have either come down in price or they don't have the liquidity I need.

    For example I think the futures are about to rip but the stock I want to buy only has 500 shares on the offer.

    Anyway my question is this. These things trade on the AMEX, so what is the best way to get a fill. You can go through the amex specialist, island, or arca which is often there. That's pretty much it right? Those three?

    So does everyone always pick and choose differently each time. I mean if Island is there I'm hitting him, but if all the islands have pulled for a a dime, and you think the move is good for 25 cents, is it better to pay up and hit the dime or would you be better off sending the order through the AMEX?

    Has anyone set up one hotkey that can just hit everything? I know Arca can hit market makers on nasdaq's but I have never used arca on a listed. Can an ARCA order fill against any exchange or only against other ecn's and market makers.

    Also these other exchanges....boston, cincy, etc. Can anyone here hit them, ever? Surely someone can....but I have never been able to. It sure is annoying when you wish you could though.

    Also I assume there are tons of hidden island orders that are fractons of a cent inside the ones that do show, is that almost always the case.

    Much thanks.
     
  50. NY is pretty big and powerful and easy to be filled on SPY QQQ

    Robert
     
  51. Since I trade NQ i rarely trade QQQ but because I often trade QQQ options I keep QQQ quotes from Island on my screen. Rarely do I see the market anything more then 3 cents wide and the times I have have traded Q's on Island the fills have been instantaneous. Cincy which is pretty much owned by the CBOE (regulatory reasons, thus the irony that Cincy is based in Chicago) is partnered with Island.
     
  52. the options on the QQQ's are extremely liquid, and rarely have I seen a large opening gap on the QQQ's. As far as daytrading is concerned, I would think there would be better opportunities in individual stocks or in the futures, but that's not my specialty at the moment.