I was just wondering, with many of you mentioning that you're sitting on the sidelines and waiting to see what will happen with the Fed rates, or if the DOW and S&P will also collapse--are any of you daytrading on a regular basis during these times? If not, what are we supposed to do for money while we wait, or are you guys all doing something else on the side? What exactly is it about this market that makes it so tough to trade right now? Is it the fact that almost all the volatile stocks that used to trade for $100-$300 are now under $50?
IM still trading, if anything, im trading a lot more lately. It's much more volatile, and really choppy this last week, so im taking more trades, and looking for smaller profits (.3-1.5 instead of 1-4 pts). I've actually been doing better lately, (I had my first and third best weeks these last 2 weeks b/c as a daytrader, I profit mainly from volatility, and there has been plenty of it) The think that makes this market difficult, is that 1) not as many traders are skilled at shorting and 2) a lot of the stocks that were over 200 and giving the 10 pt swings are now in the teens and 3) the liquidity has been drying up, and there are less "moron" traders who are placing bad trades, and buying on the offer, and letting me out of bad trades by giving liquidity on the ecn's. (has anyone else noticed the sudden lack of ecn liquidity, especially on island, which is for daytraders, b/c inca is all over the offer lately)
I too am continuing to daytrade, although I was one who preferred to trade smaller share lots for bigger point swings. Now that those daily ranges have compressed (for the time being), I daytrade a bit less and have been doing more multiday swing trades (mostly on the short side). If you're willing to take bigger share positions and settle for smaller point gains, this market is still extremely day-tradeable, otherwise I've found it easier to ride the trend (that is down) for several days at a time.
Praetorian2, If your profit objective is now .30-1.50, what kind of a stop loss do you use? If you're going for a .30 profit, you shouldn't be risking more than .10... or so they say. So how do you manage to keep from being constantly stopped out of your positions? Even at the current low prices, some stocks like CHKP, CIEN, CMVT and JNPR have average daily ranges of $6+. I would think you'd have to risk a minimum of $1-$1.5 with a profit goal of $3-$6 on those stocks. Zboy, What exactly are you using for indicators to go short on your multi day swing trades?
mgregor, I use plain old fashioned chart patterns and trend lines to determine my swing trades. For instance, on JNPR which I have done the majority of my trading, its chart shows it in a descending channel. On Feb 26, JNPR hit the upper boundary of the channel, which also coincided with the daily lows from Feb 13 and 14. I went short there, and covered on the 28th as I was stopped out. Being that we're in a bear market, I did not go long on the bounce off the lower boundary, but went short again on March 6 as it hit the upper boundary again as well as formed a topping tail. As of right now I'm still short on it, waiting to either get stopped out or a bounce off the lower boundary. Basic technical patterns still work, although there is the tendency in the bear market for resistances to have more power than supports.
I don't trade many of the "known stocks" If i gave you a list of what I traded on fri, you've probably only heard of maybe 20%. As a result, most are rather low in volume (usually under 2 mil). My stops aren't rigid lately. Instead, they're rolling. Lots of pyramiding off bol band hits on the downside looking for bounces, etc. (sometimes I'll loose up to 5 pts looking for only 1 pt of bounce and still profit b/c of the pyramid) It's rather hard to explain what I've been doing lately. I've been experimenting a lot lately with lots of new things to compliment my standard breakout and continuation trading (mainly for harder markets like these). All I can say is that the results speak for themselves, and I've had my first and third best weeks the last 2 weeks, and have not taken a single short all week this last week. On trading NYSE stocks, my stop is normally .05 or less. That's because if I enter the trade, it is the absolute bottom. Im often pissed if anyone gets more than 500 shares at a lower price than me. It's just that I've made trading the NYSE into a specialty. If I see more than a few hundred trading below me, then I'm wrong, and out. usually -.1 to .15, rarely more. Therefore stops are not needed. It's really hard to explain my NYSE trading or my new nasdaq trading so it's easier to speak more broadly about my tactics and observations on the current market.
One thing I've noticed is that the trading on heavy stocks like CIEN and JNPR is alot more "stiff". Oftentimes someone will just sweep up like 20,000 shares on the bid or ask and just move the stock 1/4 in an instant. Trading on these stocks reminds me of a dog trying to catch his own tail. Everyone's chasing micromomentum shifts.