I am interested in what method others use to trade. I know this is a general question............it is intended to be. I trade in short time frames and use a divergence system that relies on double tops and double bottoms. An analysis is made and signal is generated based on comparing price to the MACD signal line and a stochasitc oscillator. I don't really care where the market is headed and don't need to predict long term. Trade in the present. Whatever the market is offering, I focus on this.
I trade multiple strategies, all very different from one another. opening orders- in 10-15 positions at once, out within 30 minutes. very short term scalping based on a filter that streams symbols all day- 100+ trades a day, in positions 5-10 seconds. long term pair trades- based on charts and fundamentals, positions held anywhere from a couple days to over a month. market making- making an inside market on illiquid stocks with wide spreads, buying on the bid, selling on the offer. And about a half a dozen other strategies in the works, many of them incorporating automation. So far I'm doing everything manually and am pretty much at the limit of what I can do simultaneously.
I prefer the daily and longer charts, and use a simple price-crossing-an-average for entry. An MACD divergence is always a plus. Exit is based usually on a reversal pattern, a trendline break, or if I am really lucky, a price-crossing-an-average. My other preference is a consolidation break.
Trade ES 1M, 3M, 5M 6 trade per day average Target on most trades is 2 points. Signal on 5M looks for 6 points. All info on what I do is in an earlier journal. http://www.elitetrader.com/vb/showthread.php?s=&threadid=18677
does attempting to make the market on illiquid stocks really work on a consistant basis? aren't you risking a good bit there?
One of my favorite setups occurs when the market breaks out of a mid-day tight consolidation pattern, as happened last Thursday. I place a buy stop above the market and a sell stop below the market at levels that I feel represent a genuine breakout from the chop. PEG LEG JOE
Joe, Do you look for this daily breakout as a trading method each day? Or only when a pattern emerges from the mid-day consolidation?
Only when there has been at least 1 1/2 hours of consolidation (chop-fest). I generally do not do any trades in the middle of the day. Only the mornings and the afternoon if my consolidation breakout setup appears. PEG LEG JOE
You comment was interesting. I have never approached trading based on taking a position whichever way things go. I always make a decision based on very short term and if things don't go the way I thought, I just stay out. Your style makes sense.