From a numbers standpoint, the daytrading range (high - low) for the SP market is averaging 16.6 pts. this year. This is the lowest range since 1997 (13.8) and is 17% lower than last year (20.0). The two day range (in at todays high or low and out at tomorrow's low or high), has declined by 20.5% from last year (23.8 vs 29.9). Again, it's the lowest since 1997 (21.0). The followthough ratio (2 day range versus today's range), is at it's lowest level since 1985. (23.8/16.6 = 1.43 vs 2.7/1.9 = 1.42). Last year it was 1.495 (29.9/20 = 1.495). The number of trend days (open near high or low and close near low or high), has declined from 10 during the first two months of last year to 6 for this year. The decline in opportunity seems to be just a statement of observation. Not a statement of perception. My own plan for March has changed to increase size and shorten my timeframe to 1-2 hours instead of all day (until the followthrough improves).
Anyone who has been around for more than a couple of years probably realizes that the current state of trading is more "normal" than the past few years have been. Never before has there been a prolonged period where you could buy EVERYTHING and make money, or then switch and sell EVERYTHING and make money. Now the trading is back to normal where a trader's skillset makes money instead of the trader's ability to catch the wave. My philospohy is to have a stable of angles and to capitalize on whatever is working until it stops working and then adapt. As we are seeing with pairs, OO strategies, MACD crossovers, etc., nothing works forever. That is all.
Great Info - is there a web-site or service that has this? Or is this your personal data tabulation? Thanks, Paul
Acrary, very, very true. I trade some 30 variations of 5-6 systems and, frankly as a whole they're all under water for the last 4 mos. Those figures are even more pronounced in the small and midcap indexes. The "rush" to either buy or sell appears to have gone away, rendering a lot of breakout/follow-thru systems and strategies useless in this environment. Finding something that not only works in today's market and would not have fallen apart in recent years, appears to be quite a challenge!
Take a look at how the ND ranges have changed: Across the top is the number of days in the trade. Underneath each number is the total points available for the holding period. The next column is the average (total points / number of trading days) 1 = Daytrade 2 = In at low or high today and out at high or low of tomorrow 3 = In at low or high today and out at 2 day high or 2 day low
Solid post rs7. That expresses well my own perception of what's up with trading and in the market now. And there were a lot of other good points made here too. Other things that are making trading more difficult than the recent past, it seems, are the participants in this market which seems to be made up principally of hedge funds and professional traders with buy and sell programs kicking in at various times. Also, obviously in the last short while, as was pointed out above, the ranges are a lot tighter and the market jerks one way or the other on the latest rumor/news. But as many here have pointed out, it's ultimately our choice if we choose to do the extra work that's required to find the opportunities which are there. It certainly beats a lot of other professions I've been involved in. And if you stop to think about it we're incredibly fortunate to have any opportunity to do this for a living. Just think of the plight of so many in this world. How could we ever justifiably complain and why would we bother? I certainly appreciate the comradery of other traders in these forums and other places attempting to help each other succeed during these times.
Very good point. There was the secular bear market from the mid '60's to 1981 where the Dow basically went nowhere. Here's a link from Yahoo with weekly prices during this time frame http://table.finance.yahoo.com/d?a=0&b=24&c=1964&d=11&e=25&f=1981&g=w&s=^dji But even then, as you can see, there was movement within the ranges and opportunities as some traders obviously did very well.