Getting hammered - why?

5Pillars · Mar 21, 2008

Quote from nzbryant:

Hi

Ive done rather well over the last four years. Even in the fall in the middle of last year (07). Was short and made money on 80% of trades. Now Im getting screwed.
Rod

I primarily use market delta based signals when I trade, and I have had stronger signals since August than at any time before. For the last 7 months there have been much bigger delta divergence signals in magnitude than what I had ever seen before (which I am sure is a reflection of the volatility expansion).

For my method of trading it has become "more clear" as to when there are the most optimal times to enter trades. I am seeing HUGE "net negative" positions as the market makes a new high during rallies, to then sell off hard 20 to 30 points or more. Then I see HUGE "net positive" positions as the market makes new lows, only to then blast off and rally 20 to 30 points. For what I do, the current market conditions have made the signals more prominent and obvious to spot - this has been a very good change imo.

5Pillars · Mar 21, 2008

Quote from lescor:

This market is a daytraders dream come true. I chat with a dozen different experienced traders daily and they are all doing awesome in this market. You need to adjust to the big change in volatility and your stops and bet size should reflect that, but there is huge opportunity out there daily. Maybe it's different for swing traders or trend followers. I do a lot of mean reversion stuff that loves big chop and whippiness and I end every day in cash.

January was my number one month of all time. February was top ten and after yesterday March is now at #2 all time.

Viva volatility!

I am on board with your statement 110% - best of times right now.

gehko · Mar 21, 2008

In times like this if you are going to hold a position overnight then you have to hedge your risk. You cant think of your "trades" you have to think of your portfolio. Now is a great time to learn about pairs and day trading. So instead of getting mad at the market learn from what it is telling you so that you dont make as bad of a mistake next time.

QQQShort · Mar 21, 2008

Quote from condorll:

If you are a EOD swing trader, the last week was very difficult to trade.

If you are an intraday day trader, this past week was a dream come true, mega $$$$ to be made.

If you are not succeeding intraday, well, all cash IS a position. Let the market establish a trend before jumping in again.

Well said.

pcdunham · Mar 21, 2008

I don't think this market is all that unpredictable. I've been doing well. I'd much rather a volatile market than have the vix back below 20. As far as people getting killed in BSC, I don't have much sympathy. I don't trade stocks much but I know people that made a killing on BSC getting short on friday. And no, those stocks don't always bounce. Commodities were way overbought. I don't see what is surprising about them dropping. All I can say is it is possible to make money consistently. Sure, I'd rather the government keep their hands off, but they felt the need to intervene, whatever. Finding excuses for why you can't make money never made anyone a better trader. There are a few options - adapt, blow your account up or just don't trade until conditions change.

huh · Mar 21, 2008

I'm having the best year so far trading strictly rut, ndx, and spx options only. Being long on both sides and adjusting positions. I was doing a lot of credit spreads up until sept last year and switched to debits, basically buying the iron condors rather than selling and its been easy money. I definitely don't have the skills to make money trading stocks or commodities in this crazy market so I"m sticking to just index options.

DennisR · Mar 21, 2008

Quote from huh:

I'm having the best year so far trading strictly rut, ndx, and spx options only. Being long on both sides and adjusting positions. I was doing a lot of credit spreads up until sept last year and switched to debits, basically buying the iron condors rather than selling and its been easy money. I definitely don't have the skills to make money trading stocks or commodities in this crazy market so I"m sticking to just index options.

That's pretty funny. I was probably the sucker selling the IC's to you, lol. Gimmie a couple bucks back. Do-over!

Anyway i gave up on selling IC's for a while. I was always afraid to play with the vix but i think it is the most consistant opportunity these days. you can almost count on 10% swings. I've made back some (not all) just on the vix.

NQscalper · Mar 21, 2008

I'll be honest. I'm not having a great time of it lately. In theory, I love volitility and usually do better in volitile markets. Unfortunately at this point, for me at least, it's too much of a good thing. 1% daily index moves are great, once you start getting 2% plus, my head starts spinning.

huh · Mar 21, 2008

Quote from DennisR:

That's pretty funny. I was probably the sucker selling the IC's to you, lol. Gimmie a couple bucks back. Do-over!

Anyway i gave up on selling IC's for a while. I was always afraid to play with the vix but i think it is the most consistant opportunity these days. you can almost count on 10% swings. I've made back some (not all) just on the vix.

Sorry dude hate to see people lose money but I guess in order for me to make some...somebody else has to lose some. I'm sure I'll give it back to you in the coming months

I've been using the vix quite a bit also. It seems like everytime the vix closes around 25 I have been opening FOTM put vert spreads for like .15 or .20 each on the rut or oex and when vix gets to around 30 I've been buying the FOTM call vert spreads for around the same. Pretty limited risk and decent reward. Heck if you get a .10 spike in price you've made 50% and this has been the case with the recent volatility and the massive moves up and down.

Best market conditions I've traded and I hope vix stays up here forever!

DennisR · Mar 21, 2008

Quote from huh:

Sorry dude hate to see people lose money but I guess in order for me to make some...somebody else has to lose some. I'm sure I'll give it back to you in the coming months

I've been using the vix quite a bit also. It seems like everytime the vix closes around 25 I have been opening FOTM put vert spreads for like .15 or .20 each on the rut or oex and when vix gets to around 30 I've been buying the FOTM call vert spreads for around the same. Pretty limited risk and decent reward. Heck if you get a .10 spike in price you've made 50% and this has been the case with the recent volatility and the massive moves up and down.

Best market conditions I've traded and I hope vix stays up here forever!

I'm doing a similar thing. I've just been buying ATM vix calls when we drop around 25, and selling 30/32.5 call verts when we go above 30. Backtest it if you want. It's been easy money. I just don't like to hold with less than 2 weeks to expiration, but in the worst case i've been able to roll to the next month (for credit) when it gets too spooky. I mean come on, do you really think the vix won't revisit 30 by april expiration? I'll be buying calls monday unless futures go down. I just bought back 30/32.5 call vert for 15% prof.