What is a good way to take advantage of volatility

Discussion in 'Trading' started by never lose ever, Aug 22, 2010.

  1. Very simple. I'm not looking for any long term investing advice or formula's just very simply how can I make the most out of the volatility in a stock. How can I find entry point's and exit points?

    I know it's a basic questions but still
  2. spindr0


  3. and do you have the answer?
  4. As long as you're trading momentum and you're looking at the intraday or multi day swings, any increase in volatility will mean larger distances between the natural support and resistance zones in the market. So you don't need to do anything other than make sure you're trading. The results will be reflected in greater profitability if you're picking the market right.
  5. sell options

    Just sell out-of-the-money calls and puts, sit back and collect premiums, you will be on the beach in no time.

  6. Be cognizant of the "sigma" for the stock, it's average daily expected range for "fade trades". :cool:
  7. charts


    Find a time frame where the price is trending. Then, if your trading skills allow, trade it ... :)
  8. charts


    I disagree ... that's bad advice ... :)


    It's not rocket science. LEARN a stock. Look at it's intra-day typical range. Note the range. Then trade it. So many posters here, not necessarily the OP, think trading is some monumental challenge. It's not. Start small with size; develop confidence. Then up your size. For example, I trade certain stocks every day; ATML, SANM, PMCS as well as SDS when I'm bearish. If you truly learn a stock, and know it you'll know when to enter (long or short) and when to exit. As long as you capture a small part of the intra-day range you'll be profitable. I've done this for 15 years. Don't make it more difficult than it is.
  10. spindr0


    How can I find entry point's and exit points?

    Now that's the $64 question

    Can I tell you here and now where the entry and exits are? Hardly. But if you've traded intraday for awhile, you know there's a feel for a stock in play. As it moves on volume (momentum), you take a position, possibly adding more as it moves more in your favor. And at all times, you stop loss it.
    #10     Aug 22, 2010