I gotta tell you - these markets are too insane for me

Discussion in 'Trading' started by iceman1, Nov 16, 2011.

  1. wow, i guess my view should be that these crazy moves are opportunities. My inclination is to reduce risk, by spreading and hedging. Every fricking time I do that it seems that I reduce the impact of a move (meaning profits get cut short).

    Today I scale in to OIH Dec 135p thinking I may have to wait a few weeks to cash in; so I spread against 124p. AFTER ALL oil is making new interim highs. So who the f-ck would figure we get a sell off. OF course I am glad we did.

    But in all seriousness, are any others and in particular the gunslingers out there, getting hammered by these wild swings at EOD with little no reason. It's like a fricking shell game out there. You gotta figure out what a fricking computer is going to do at any given moment.

    I keep telling myself... "wait until the f-king end of the day" before making a move.

    No wonder guys don't want to be swing and position trader like I am doing. Used to be you could hold a position overnight. Nowadays, since I decided to do some trading in June, it's like an insane asylum out there. I haven't even looked at the markets in 5 1/2 years, after many years of trading back into the 80s; and since June what I have seen is often inexplicable.

    However, like I said, this does create opportunities... but it also places anyone with open positions overnight or even intra-day in jeopardy, and harms way.

    When did it become this insane?? Who likes these markets?
  2. Maverick74


    Iceman, these markets feel pretty normal to me. If anything, a little dull. We've been stuck in wide trading ranges all year. But there is plenty of action in other markets like oil and nat gas that have been one way trades. I'm not really sure I understand your gripe. Markets are not "suppose" to go straight up or straight down.
  3. lindq


    I like these markets because they play to the strength of my bread-and-butter system, which is flat EOD.

    But definitely, overnights are deadly. So best to deal with what is, and not what you want it to be.
  4. Not to mention low low volume ...and lower volume this week in most markets.
  5. Iceman1,

    I typically hold positions from 4 to 180 days and over the past year have experienced no more than a 4% drawdown. The key is to remain hedged AND to trade directionless trades. I am smart enough to realize I am not smart enough to predict where any market is going.

    Best of luck.
  6. 2008 was very much like this, albeit with more volatility and alot of very palpable fear. This time around I sense just an overwhelming complacency that Europe can somehow repeat the same measures that the US pulled off 3 years ago...only it hasn't happened and every day for the past 3+ months, the markets are fully dependent upon more political rhetoric to give it direction.

    Definitely, the longer we chop around, essentially compressing around this 200 day moving average, the less interest there seems to be for anybody to press their positions.
  7. Adapt 2 systems, one to handle the consolidation and one to handle the trending. The market is always evolving, so you must adapt. I prefer trend following as it's simple. But still this game is 99% risk managment. If you employ stops logically out of the daily noise for trend following you'll be fine. I've been trend following these last few weeks and I'm up modestly for my account size (~30%). I've taken profits and losses intraday because of retracements, but I adjust my stops so that if the market goes in my favor, I don't lose all my money on a retrace. This is logical for trend following. Usually if I take a loss, we get up past where I originally shorted, and then when the 'trend' reverses, I can resell at a higher price.

    If I had a RTM strat going I'm sure these last few weeks would have been wonderful.

    I'm not all that knowledgeable about liquidity/volume, but issues with liquidity I think are part of what cause the infamous 'crashes' in history. There are many explanations regarding what could possibly be liquidity/volume issues, where there isn't enough on one side of the market to sustain a price level, thereby causing the market to zoom in a single direction quickly. Once all those orders are taken, there is only one other direction to go, once the volume has dried up on the other side. I'm sure there are algos out there that try to take advantage of that once they sense the buying/selling has stopped, right??
  8. Market goes up. Market goes down.

    If your current strategy does not work well in the current conditions, stop trading it until you figure out what`s wrong.

    It may be tough to swing trade this market and I certainly don`t have the skills to do it, which is why I`m glad that I only trade the intraday swings whether that is up or down. :)
  9. Some traders like volatility - when it is predictable - but step aside when it is not. If you are emotional in your trades, then staying out is the smart path to take.

    I am a discretionary trader and I am having lots of fun in these markets currently. My position trades are pretty much shutdown for now. I am looking for a major entry point again for those trades as I build my candidates list and wait.

    I can sometimes see system traders being chopped up in these markets. Today, for example one, move of SPY today was particularly strange. It was explained later on by the counter move and I should have held my options longer, but I was focused on determining the best exit points and exited too soon.

    I lost some money, but was sitting on an equal gain at one point. Something for me to learn I guess. I am still ferreting out if there were any clues and precisely what happened to apply in the future.

    I have been testing a new directional SPY options system after much study for 6 weeks and have been doing very well to date, although it is still too early to say if I will step up the size yet and keep the system. The day trades and some swing trades are simply too good to believe for me so I keep waiting for the hammer to fall but so far so good.

    There is no shame in taking a break. I have done it several times in the past. I will be doing it soon when I head to Hawaii. This is the time to sharpen ones trading tools. The wise ones do that and the dumb ones blow out trying to be right.

    Yes I am having fun in these markets and making money. My biggest problem is the feeling of excitement and the urge to ramp up too soon.
  10. Maverick

    think I need to attend a few of your meetings.
    #10     Nov 16, 2011