Highly selective trading

Discussion in 'Trading' started by illiquid, Jun 14, 2002.

  1. Mike777

    Mike777

    I'm not talking about jumping into a high risk market but rather playing longer term moves. I shorted the Q's at 37.9 not so many months ago because daily/weekly charts were clearly showing exhaustion. I havn't profited because I kept jumping in and out. If I just sat on my hands I would have been better off.
    Obviously my day trading sucks.:D
     
    #11     Jun 14, 2002
  2. I would highly recommend NOT trying to pick individual stock bottoms -- it's just not the same situation as when the entire market is falling indiscriminately and you're fading mass sentiment more than anything else. Single stocks blow up almost daily and trying to game them is extremely difficult, the biggest rewards on those kinds of plays usually involve holding overnight for several days and really knowing the fundamentals behind the selloff. The R/R just isnt the same as playing an intraday broad market bounce.

    In any case, I'm sure we all have our own favorite trades to implement, I am more curious about the "sitting still" part -- anyone have tips on being patient enough to wait for the very best opportunities? Online poker, anyone? :)
     
    #12     Jun 14, 2002
  3. you know, I here people saying that "my day trading sucks" but really I have yet to see any real proof that trying to be a scalper and paying commissions doesn't just suck period. I could see buying in the morning and selling in a couple hours if a nice move occurs, but anything tighter than that, like trying to make $.05/shr just seems like such a waste of time and effort.
     
    #13     Jun 14, 2002
  4. LelandC

    LelandC

    I agree. We need to trade less and get more out of our trades....

    Leland
     
    #14     Jun 14, 2002
  5. Mike777

    Mike777

    Sort of agree (although I don't scalp) but then look at Seanotes June journal, he does ok at it. My daytrading does suck and I am holding for a move not keyboard jockeying. I think I'm more suited to longer term trading.
     
    #15     Jun 14, 2002
  6. jaan

    jaan

    i second that. selectivity does not favour consistency.

    - jaan
     
    #16     Jun 14, 2002
  7. drdr

    drdr

    selective is good.
     
    #17     Jun 14, 2002
  8. Vienna

    Vienna

    One way to do it would be to try to sort of time major turns and trade Rydex funds- they have one that mimics the qqq and one that does the opposite, both leveraged. One is called Arctos I think. Use Brown and Co, and to get in and out costs you 5 bucks.
    If you think you have a bottom, you could wait if not sure and wait for follow thru days on Volume (IBD rules). If not sure, wait for the first retracement. Also, MACD divergences might help identify turning points. I am trying to develop a system such as this- had one been even remotely close with Sept.11, one would be up easy 100% in a few months.
     
    #18     Jun 14, 2002
  9. It all sounds nice, but let's not forget that alot of the ideas about buying only when the "extreme" event occurs are always postulated after the fact...How did anyone know that the SP was not going to drop to 960...And who stepped in and bought it at 980 this morning or the NQ for that matter? Also, let's not forget that while the VIX at 30 is relatively overvalued there really is no upside limit to the range at which the VIX can move...Heck, it hit 55 in October of 1997 and we were still in a "bull" market...

    I also agree with the contention that "capitulation" is a bull market phenomenon...The whole premise is that the weak hands or overleveraged longs are selling out because they cannot finance their positions...Those days have already come and gone..We have had so-called "capitulation" going on two years...Dumb money came and went more than a year ago...The money that is left is just sitting and waiting...The panicked longs are pretty much already out of the market...

    In hindsight over the past two months, we can pretty fairly say that each bottom has basically been a buy to cover, which then is driven higher by a series of buy programs and different classes of speculators covering and driving prices higher in stealth rallies...Each of these rallies has been sold to lower lows...It appears to me that many of the "concepts" that from the bull market no longer apply...This is new unchartered territory with regards to how things "should" act...
     
    #19     Jun 14, 2002
  10. bone

    bone

    If "selective" means that you are minimizing the number of trades you make, then you must also radically expand your drawdown and profit-taking criteria.

    You will have to endure considerable pain, because you will NOT buy the bottom or sell the top. Unless you're buying option premium, you'll need a relatively substantial account for a modest
    position.

    It's a different approach to the same goal.

    It IS possible to be a selective day trader or scalper.
     
    #20     Jun 14, 2002