» trading volatility

Got that Stock Market Turn Wrong

sniperdaytrading — Tue, 04 Oct 2011 05:27:35 +0000

Today is October 3rd, 2011;

We saw a sell off of the Wall Street well past my cut off point as recently talked about.The market should have held up above the 1120 area and did not today. Instead, it turned that energy in the opposite direction closing on the lows of the day.

Today is the first day of the trading month and the first day of the new quarter. I don’t get every call right and this one is clear that I did not get right. Losses are apart of the business and it is a little funny in that today I took a loss in own day trading. I did not stick around for a lot of action today, as I just did not feel in sync. I took two losses back to back, with the first one about 6 ticks and the second one a bit more.

I hit my daily loss limit because the second trade had a much larger stop to it. Seeing the increased volatility, felt I may have needed a little more room, but that was not really the problem.

No excuses, that is the way it is and has to be. I can not rationalize my losses but, I can still share how things went last night and what was the POSSIBLE effect of it.

Last night I was up three times with broken sleep as I had animals on the prowl for my animals. I live in the country and had a very disruptive evening. I won’t carry on as it is just life, living and the way it goes.

I could see my judgment was off and thought it best to just let it go and take the small loss for the day. I don’t like to loose more than 4 S&P points in any one trading day. The volatility is higher these days and I could justify a little higher limit, as my gains have been higher to compensate for that, but I just let it go. Today’s trades below.

As you can see, the indicators did not support my decisions and it shows. The previous turns were pretty clear, but there is always tomorrow. I have not had a loosing day in long time, but not being mentally in charge can take a toll.

I will start sometime this week to cover some issues traders face in the mental side of there venture. I will be quoting a book written some time ago that is not related to trading, but at the same time it is very related. It is a book that was written in the early 1900 century, but you would be surprised as to its Wisdom as it relates to trading. It is amazing and I will start going through parts of it, little by little.

I plan on starting that in tomorrows session as I think it will be a nice shift to offer more valuable insight into the day trading venture as it relates to why we do what we do and or don’t when we should.

This blog is basically my trading journal and get to write and explore what is predominantly on my mind. These days, I found that re-reading the book was a powerful and insightful experience and thought many of my readers would enjoy some of key quotes from the book and my insight from those quotes.

It very much relates to what we do as traders so much so, that it will help improve your ability to trade effectively no matter what method you trade. So look for some of that special insight in the days to come.

As far as calling this market turn, the momentum is down in the monthly, down in the weekly, down in the daily now with the last day and or two, so for anything to change it has to happen in the daily first and before that, the hourly and so on. So far it is all down. The market has not yet broken under its recent low in the S&P and the Dow, so from that standpoint, there is still some support there.

I will be looking for market sentiment changes this coming week to see for any extremes. Those numbers will be out on Wednesday morning and may give some insight. As mentioned in yesterdays blog, I am under no illusions that it is all entirely possible to see a massive sell off, as this is October to boot. As day traders though, it really does not mater which way it goes and need to remember that.

Until tomorrow, trade well and committed !

Trading Volatility, Friend or Foe

sniperdaytrading — Thu, 22 Sep 2011 01:38:44 +0000

Hello everyone, I am back from my short trip and did not get a deer, maybe next time.

I can see the markets had a couple of flat days for Monday and Tuesday, with today bringing in a heavy pullback near the closing 45 minutes of the day. The pull back was like 28 points from a breaking point going straight down into the close.

In looking at the charts, I saw 1160 as a possible target, but thought it might come early on in Thursdays session. I did have a piece of that move with the last part being a 10 point trade, as I scaled out on a couple of other contracts earlier on.

I took three trades after the FOMC meeting information was released, the first one was for a 6 tick loss, the second had a some multiple exits of 2 points, 4 points and 5 points roughly. I added on that second trade after exiting on some, but that was a good trade overall except for on my last contract, again adding there where I wanted to close it out. You can see that I road out the pull back for higher prices, but that was not really cool on my part. I made a mistake and made another one to try and correct it, never really a good idea. I could have easily just hit the close button and waited to re-enter. I did have a couple of clear entry signals as you can see on the chart below, but what else can I say. I wasn’t to worried, but it wasn’t really cool non the less.

The last trade had a lot more room in it, but I am still not complaining with the 1 point, 2 points and 10 points that it brought in. I nice way to make up for no trading the last few days.

The market will need to make a stand right here in this area, 1055/60. If we get follow through to the downside, the upside bias that the market enjoyed, will be gone, and lower prices will look inevitable.

In fact, for as hard and fast as the market fell in the last 45 minutes of today’s session, I would like to see a V bottom off of this current level to give the shorts a good scare. That may or may not happen.

I will admit if I am wrong in the daily target I called for 1245 minimum, as we only got up to 1214.50 from the 1140 level days back. Still a good 75 S&P point jolt, but its not over yet if we can hold onto this current level mentioned earlier.

The trading volatility has picked up and with that, I would expect big moves in the days ahead, one direction or another, so be on your toes and do your best to find precision entries, in this market you will be glad you did.

Increased trading volatility can be your best friend or you worst nightmare. You have to know how to harness the energy and make it work for you. So, fewer entries for bigger targets when warranted, can work. Just don’t get a lock on any one idea. Listen to the market. It will do what it wants, just read it the best way you know and how.

Be a manager, not a owner. A manager, takes care of the position and does what he has to in order to bring in equity. An owner, will get attached to a position and not be willing to let it go. That can send you into the poor house. Don’t do that. Hold all opinions loosely. You can have them, but if you hold to that opinion strongly, you blind yourself to the realities at that current moment.

This fact, traders to often being owners, is the number one reason why there are so many who can not hold on to gains made and thus become profitable traders long term. I know I have said this a time a two in the past, but if mentioned it once a week, it would not be to often as it seems to take the repetition of stating this fact time to sink in. This is to help and empower my readers for no other reason. To see what ever trading method you trade to best do it profitably and consistently.

Within every trader is greatness, but they to often are stuck on issues holding them back. Just hold on to the fact that you can be wrong and if and when you are, get out and re-access. Be a trading manager not an owner.

I am not above my own advise, in-fact I often write for myself just as much as for others. This is my trading journal so to speak, to express thoughts idea’s, successes and challenges.

I will have something more to say in tomorrow post, so until then, good trading.

Trading Volume & Trading Volitility

sniperdaytrading — Fri, 05 Mar 2010 01:11:51 +0000

Today is Thursday, March 4th and the markets were contained as they closed slightly higher +4 points on the S&P.

I had thought that we would see what I call a containment day or you can say, “an inside day“. What that means is, the market traded inside of yesterdays trading range. This is what I said was likely to happen for today and a general containment inside the Wedge Formation shown from yesterdays Dow chart.

One thing that I am not seeing right now is volume. That can be a little worrisome for the bulls out there. As we rally on light volume, it shows a lack of conviction to buy stock.

Trading volume for a day trader is very important, without it, you get little movement and limited opportunity. With it, and you have the market swings that can take your account equity up quickly. Often times, it takes a catalyst to drive the market, good news or bad. So, what is a trader to do as he looks for opportunities and how should he approach the day.

Let me give you one idea to think about, in trying to decide what kind of day we are going to have. If you take the average trading volume of contracts traded for the first 15 minutes on the S&P Emini futures over a set period of time, say one month or better and come up with a volume figure. Then going forward, compare that average opening volume to the past average volume and you will see it in one of three ways. It will be above the average, below the average, or the same as the average.

If it is above the average, most likely the days trading range will be greater than if it was not. The same is true in reverse. If the trading volume is lighter during the first 15 minutes of trading, it is likely that the trading range will be somewhat contained. You don’t have to make a science out of it, but if you can observe that the volume is very heavy on the open, it is likely you will see a lot of opportunities to trade for larger point returns going forward for the rest of the day.

If you take today as an example, you will see that the contract trading volume for the S&P 500 emini futures was very light during this first 15 minutes of the day. That helped then to set the precedent for the rest of the session. The trading opportunities were very limited and the range was very narrow. This is just something to keep in mind going forward, as it may give clues and bring perspective to your expectations of the day.

Trading volatility means opportunity, with low volatility, you get reduced opportunity. If you are approaching the market with high expectations of a big day and they don’t happen you are out of sync with the market. Day traders observe the price action, or that is what I feel they are supposed to do and trade accordingly.

If you are positioned to take 3 or 4 points out of the market, but you only see three or 4 ticks instead, you have only a few options.

1) Don’t trade at all and just wait. That used to be a good strategy, going into the afternoon session but the volume cannot be counted on to come back. We are to often seeing only modestly light volume increase after lunch period.

2) Bring your expectation down so that you can take advantage of what the market will safely give you. If it safely can give you 1 point, can you take it?

I know everyone has there own style to trade and that may not be your thing, but I have no problem with it, only because I can trade with a small stop and do it successfully. Many cannot do that so, they are left to be much more selective and wait a lot longer for the trades.

That is fine, if you can do that. Many traders can not and end up taking non method trades for the sake of trading while they wait. This creates over-trading and can be defined as putting on a trade without having the trading edge. Taking 10 trades or more in a day is not a problem, if you have the trading edge present in those trades. When you lose the edge, Get Out. Don’t wait to be stopped out, protect yourself and your equity.

With all of that said, I hit my trading goal today fairly easily, but I did have challenges. The challenge was to start trading during the slow New York lunch period. I know this is not the best time to trade, but getting prepared for the market open is difficult as I live on the West Coast. To properly prepare, I would need to get up a 5 am. That has been my weak spot, because I am a night person, whats a trader to do? Well, I guess I am doing it.

There are dangers in trading during this slow period, but they can be overcome with precision entries and modest expectations. My first two trades had no follow through to them, so I quickly lowered my expectations and took the very modest moves the market gave me. You need good timing and you need to know how to trade in this environment. (Sniper Day Trading)

My first two trades were the only loses I had each for -1 tick. After that I had several small gains which added up nicely for the session.

High volatility just means more opportunities

sniperdaytrading — Thu, 25 Sep 2008 09:34:43 +0000

Today, I counted the number of trades generated by my method on the S&P E-Mini’s and there were 107 trades of 1/2 point each. I took many of these trades in the first hour of the day with another 5% gain in my account. Since last week I am up 33% in my account. (100,000 to 133,800) We don’t need to be afraid of the increased volitility or swings. We just need to follow the trading rules and chip, chip, chip away. It adds up.

My minimum goal is just 4 of these little 1/2 point trades. It is no problem at all to get this, when you chip away at it. The market swings fast, very fast, and that is why my method is working like a charm. I have not had a losing day in months. When I place an order to buy, I have, at the very same time, my stop in place and my target in place. With one click of my mouse, the rest of the process is automated.

I was timing how long my orders are taking to complete and I would say that on average it is about 15 seconds. That sounds fast and it is. You sure don’t have a lot of time to stress during the trade and that’s great. If you multiply that times 4 trades (15 seconds x 4 trades= 1 minunte in the market. With each trade profit at $125 dollars you are looking at 4×125= $500 per day and that is just starting out with 5 contracts.

You need $7,500 as a deposit to place this trade. So that’s 1 minute netting $500 dollars. Don’t get too giddy in thinking that this is guaranteed without work. It is very attainable, but you need to be committed to the process and be teachable. When the time is right, I will share more of this information with a select few.

Below is a chart of the first 20 minutes of trading this morning. Please click on it and read some of the notes I have posted. It will give you an idea of what I am doing. Drag your mouse over the link below and click on it after you see the picture.

http://www.screencast.com/t/k4outkMcBB

http://www.screencast.com/t/LnO2M2cR