This movement doesn't make a difference to most prop traders. My guys reduce their size and watch the downside. The volatility takes care of the upside when they are right. These have been amazing trading days with the ES covering 20 pts in 10 mins oftentimes. Folks... prop or no prop, if you lose sight of the fact that risk is the number one priority, then you should expect a whole bunch of winning trades can be consumed by one large loss. These are the days that are most stressful to prop owners, risk managers and partners. It is a no-win situation for some who see that others are killing it and they are not or they are getting killed when others are chipping away. A rise in volatility is like a pop quiz to test our emotions, risk management and endurance. Get plenty of rest and stay humble and loyal to your plan. Take care, FT71
Why do traders like these choppy markets as opposed to a nice trending bull or bear market?...at least then it's easier to know what side to take. cm
10 to 15 meaningful swings (8 to 10 ES points) a day vs a slow summer day with at most 2 to 3 swings with no range. Capturing just 2 to 3 of these swings may very well equals to watching the market whole day last year same period.
"Why do traders like these choppy markets as opposed to a nice trending bull or bear market?...at least then it's easier to know what side to take." cm It's just a different kind of trade setup, and moves faster, so if you can trade a range, and still stay in the same direction with the market, one can make money 10 times as fast. 3 to 5 $ swings within an hour in many of these stocks is the norm lately. One can grab 5 to 10 out of a GS, AAPL, RIMM easily in this kind of market. Volatility should be a traders dream come true, if he has the skills to trade it. The faster a market moves with this kind of volume should be best of times. Slower trading is great and very profitable as well, but one has to have the ability to quickly adapt and recognize what kind of market were in.
Times like these, my indicators are almost useless..at least my MA's are when theres no trend. reading price action only while scalping seems like the way to go...for now anyway. I could be wrong. cm
A trending market provides fewer opportunities for prop traders who trade often to enter. Also, a trending day on the upside tends to have little volatility and is a "grind" to trade. A market that trades back and forth gives more opportunities to enter at full size, scale out and let runners run to the next turn and then start over again. A tending day a year ago might give a range of 14 pts. A day where the market has two-way interest will give 30 or 35 pts in the swings. Big difference and more opportunities to catch something.
our guys have had best 2-3 week run in about 5 years we are more momentum some guys obviously havin hard time with the huge moves..more single and double type traders but the more experienced momentum guys are puttin up 99=01 type number hopefully VIX stays like this for a year..... :-D d
Ditto, this is what we've all been training for. I made more in the past 20 days than the past 20 months. I would feel lucky to even get another week out of it. We can only hope there are dozens more funds falling apart at the seams.
No kidding, more of this kind of volatility would be great. So many stocks to jump on board it's unreal. The hard part is going back to slower days, and beig content with smaller gains. That is the hard part for me. Especially after such large gains day after day, then back to the grind. One has to cool his greed and expectations.