How large of a stop do you think you would need to trade a 20 point day?
Amazing volatility - Will it last?
- Thread starter Laissez Faire
- Start date
That depends on your execution. But obviously, if you're 10 points in the red, you were or are on the wrong side for an intraday trade.
that's my point. 20 points looks good from low to high, but what kind of stop would you have had to survive? So, it all gets adjusted, and even with what looks like high volatlity is just normal volatility when you figure risk to reward
otherwise, I see no hope for a bracket trader
Well, I disagree.
Let's say you risk 5 points today to gain 25 points. Theoretically speaking. That's an R/R of 1:5.
I don't have time to access my historical data at the moment, but there's no doubt that there have been periods where the average daily range is 10 points and the larger intraday swings may be around 7-9 points. So, perhaps you will use a 3 point stop. Now we're down to an R/R of 1:3 at best.
And that's not accounting for the number of daily swings. Some of those slow days would have perhaps one entire swing the whole day. Now there's typically at least 5 larger swings in the range of 10-30 points. So, obviously, there's much more opportunity now during the day as well.
To summarize:
- Better R/R.
- Significantly more opportunities through a day.
I hear ya, but now you are betting on volatlity, so it's out of the fire into the pan (over time)
In otherwords, everybody is directional
spread traders make directional bets on the spread
volatilty traders make directional bets on volatilty
so everybody is directional, and the same rules apply to all
ECB openly stating today that they are 'buying stocks' at low points through out the day. Japan and Fed mostly definitely doing the same thing. Our very recent volatility really should just be selling activity with some basing and buying at technical areas before another leg down. The rocket shots back out of the red through the day are gifts from CBs; And really are fairly easy to trade and make money from as they hit and buy at the lower points of the graph through the day. Also around 2:30 or at 3pm they hit the lows and prop the tape going into the close.
This may not last too long as CBs buying equities in markets is a sign of pure desperation and as we have seen in China never works beyond very short periods
This may not last too long as CBs buying equities in markets is a sign of pure desperation and as we have seen in China never works beyond very short periods
Another amazing day. Wow!
I give up, you win, yes these are volatile days even for a long term percentage trader. 5.8% in JAN 17 Crude.
Yes. Another great day. Slightly less volatile than the prior days, but still pretty good by any standard (let's remember the days where you have only one major swing in a day and it's not even 10 points).
12 down, 22 up, 10 down, 16 up.
The question in the head line remains unanswered though.
Will this last? If yes - for how long?
ok, just remember, after everybody gets killed on unexpected volatility, they adjust, most expand their stops and targets. Some abandon futures altogether and go to options where they can ride a wild market with no stops. Then they also get killed in time decay when it normalizes.Yes. Another great day. Slightly less volatile than the prior days, but still pretty good by any standard (let's remember the days where you have only one major swing in a day and it's not even 10 points).
12 down, 22 up, 10 down, 16 up.
The question in the head line remains unanswered though.
Will this last? If yes - for how long?
Yet there is one guy who can successfully walk through this mine field usually just by acccident.
Will it last? 10+ points on ES? If it does, then 10+ becomes normal and nobody calls it volatile anymore and everybody adjusts.
But getting back to percentages, if the market goes up I would expect the daily point range to increase.
If the market goes down I would expect the daily point range to decrease.