Intraday Breakouts

When I started daytrading late in 2001 I had more of an position trading background (but from todays view my "style" of the last years seems more like "Las Vegas Style"). In January 2002 I started to use my swing trading setups from the daily charts to enter intraday with breakouts to new high/low for the day - and did quite well. In February I got smoked with this strategy and in March I got a lot more selective and basically I'm going nowhere with this strategy (having perhaps 2 shots a day with everything in line - I started to use a watchlist also, because my swingtrades also seem to work less - when I looked at some older charts at the weekend I found that in late 2000 it was very common for some stocks to have 5+ consecutive up- or downdays - today the same stocks rarely have 2 or 3 consecutive days in one direction).


Last weekend I read some older threads on this board I there have been some comments about entering on intraday breakouts being leftovers from the momentum time of 1999/2000.


So I wonder if this is just a temporary problem of low volatility or if trading intraday breakouts should be tossed out of the window completely.


Comments welcome! Alternatives very welcome!!!


Harry

 

My swing system has done well up until Nov-Dec 2001, but now the monthly return has dropped in half since then, or gone negative some months (Like March 2002). I think the volatility has really dropped and stocks aren't ranging like they used to. I've been adapting by entering and exiting based on intraday S/R instead of the more extreme daily High and lows. I think it's temporary, and once the pendulum gets going again we'll have better days.

 

i think decimals has hurt people playing breakouts like we used too in the old days.just too many levels to eat through.

 

Harry-
the same thing has been happening to me.January was good..but lately breakouts have been more like fakeouts
In March I thought it was due to the low vix..now I'm not so sure...volatility is picking up so maybe breakouts will too...but it seems like the Dow and S&p haven't moved in months

 

Thanks for the comments ... they make me feel better ... but only a tiny little bit

Harry

 

i traded intraday breakouts very successful til oct 2001. i used to look for stocks that were near their hod and consolidated in a tight range. if you knew the stock it was pretty much enter the trade, trail the stops and lean back. shooting ratio of approx 75%.
however, after the 25k was introduced in late september everything had changed (in my opinion). all the stocks that did pretty well before, at once only produced fakeouts. little breakout then fallback into the previous range and - even worse - breaking down.
i changed my style since then, because trading intraday breaks was more than scalping then following a trend.
if you´ve traded b/o in 99/00 you made a killing (barry rudd has a good book on intraday breakouts btw), but right now to me it seems to be not tradeable in a profitable way. but probably i´m wrong...

kev

 

Correct you are sir , decimals suck big time !!!
Those days of getting a quick 1/8 or 1/4 are now more like a quick 5 or 10 cents.
And low interest rates suck also especially if you have a lot of cash !!! :-}

 

Thanks for the Barry Rudd recommendation, Karabugla! _Stock Patterns for Day Trading_ and its sequel look interesting.

Does anyone want to sell either one for $25?

Aaron Schindler

 

Have you changed your trading style overall - or just the way you enter stocks intraday? I still look at daily charts for stock selection - in hope better days are ahead when you will be able to hold for more than some minutes :eek:

Thanks,
Harry

 

Hallo Harry!

ich freue mich, dass du noch am ball bist!

das schwierigste am trading (nebst disziplin) ist, sich auf die
veränderten marktbedingungen einzustellen.

was kann sich verändern:

1. Trend
2. Volumen (damit meist auch der spread)
3. Volatilität

wenn du so wie die meisten trader eher auf der longseite agierst,
so wirst du eine erklärung für die performance der letzten zeit haben.

wenn du zu lange an deinen favoriten kleben bleibst und
versäumst aktuelle "heisse" werte zu suchen, so werden
die intradaybreakouts zu gering bleiben.

wenn du in marktphasen ohne sich abzeichnender trends
und geringer volatilität nicht genügend geduld hast zu warten
so werden sich viele kleine aber zermürbende verluste ergeben.

wenn man das alles so schreibt, klingt es so einfach, ist es aber
leider nicht.

ich würde mich freuen wenn wir uns demnächst einmal treffen könnten.

lg
peter