What is a good way to take advantage of volatility

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

  1. spindr0

    spindr0

    If it was that simple, there'd be no one living inland,
     
    #11     Aug 22, 2010
  2. Why do you chose these stocks?

    Thanks.

    PS. Oh, sorry .... another question ... Have you noticed things getting more difficult for you with this strategy over the last 4 - 6 years?

    Thanks, again.
     
    #12     Aug 23, 2010
  3. It is basic as you say. Measure the volatility and the direction of the trend, if there is one. I am not going to tell you how. This is your homework. Then, if volatility is let's say X points and trend is up, go long with 2X/3 target and 5/4X stop. I am not going to tell you how and when. You figure that out. It works for me. Very well.
     
    #13     Aug 23, 2010
  4. DHOHHI

    DHOHHI

    I trade those stocks since they most always have a decent intra-day range - are lower priced stocks (so you can trade decent size) and they're ones I've come to "know" in recent years. If you trade the same stocks over and over for an extended time you have a gut feel as to what kind of moves you'll see from day to day. Sure, news can come out that'll exacerbate moves at times but more often than not you have a sense of what to expect just watching the major indexes and the SOX (in this case).
     
    #14     Aug 23, 2010
  5. spindr0

    spindr0

    That's good advice. Sooner or later everything bites ya but sometimes you can get lucky and stumble onto something that channels for a good stretch of time.
     
    #15     Aug 23, 2010
  6. Thanks.

     
    #16     Aug 23, 2010
  7. Oh sorry, I forgot the picture

    [​IMG]

    Thats Laguna beach no less

    5yr
     
    #17     Aug 23, 2010
  8. With liquid volatile swinging instruments your entry and direction do not matter. You have a 50/50 chance of picking the direction and hitting equal distant exits and stops.

    It boils down to scalping oscillations and managing positions (scaling size, reversing, taking profits).

    I personally like front loading risk and draw down for active instruments. Ie. flip flopping sides from your initial entry inside a tight range, scaling size, playing breakouts.

    Its a fast profitable game when price is moving.
     
    #18     Aug 23, 2010