Highly selective trading

I'm not talking about jumping into a high risk market but rather playing longer term moves. I shorted the Q's at 37.9 not so many months ago because daily/weekly charts were clearly showing exhaustion. I havn't profited because I kept jumping in and out. If I just sat on my hands I would have been better off.
Obviously my day trading sucks.:D
 
Originally posted by Vienna
Would be an interesting thing to do with index futures only and not individual stocks: Trade 1 instrument only, and only a few times per year- beautiful, if one could make it work...:)
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I would highly recommend NOT trying to pick individual stock bottoms -- it's just not the same situation as when the entire market is falling indiscriminately and you're fading mass sentiment more than anything else. Single stocks blow up almost daily and trying to game them is extremely difficult, the biggest rewards on those kinds of plays usually involve holding overnight for several days and really knowing the fundamentals behind the selloff. The R/R just isnt the same as playing an intraday broad market bounce.

In any case, I'm sure we all have our own favorite trades to implement, I am more curious about the "sitting still" part -- anyone have tips on being patient enough to wait for the very best opportunities? Online poker, anyone? :)
 
you know, I here people saying that "my day trading sucks" but really I have yet to see any real proof that trying to be a scalper and paying commissions doesn't just suck period. I could see buying in the morning and selling in a couple hours if a nice move occurs, but anything tighter than that, like trying to make $.05/shr just seems like such a waste of time and effort.
 
Originally posted by dotslashfuture
you know, I here people saying that "my day trading sucks" but really I have yet to see any real proof that trying to be a scalper and paying commissions doesn't just suck period. I could see buying in the morning and selling in a couple hours if a nice move occurs, but anything tighter than that, like trying to make $.05/shr just seems like such a waste of time and effort.
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Sort of agree (although I don't scalp) but then look at Seanotes June journal, he does ok at it. My daytrading does suck and I am holding for a move not keyboard jockeying. I think I'm more suited to longer term trading.
 
Originally posted by vikana
My personal taste is to make many smaller profits/losses and be happy whenever extra good days come around.
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i second that. selectivity does not favour consistency.

- jaan
 
One way to do it would be to try to sort of time major turns and trade Rydex funds- they have one that mimics the qqq and one that does the opposite, both leveraged. One is called Arctos I think. Use Brown and Co, and to get in and out costs you 5 bucks.
If you think you have a bottom, you could wait if not sure and wait for follow thru days on Volume (IBD rules). If not sure, wait for the first retracement. Also, MACD divergences might help identify turning points. I am trying to develop a system such as this- had one been even remotely close with Sept.11, one would be up easy 100% in a few months.
 
It all sounds nice, but let's not forget that alot of the ideas about buying only when the "extreme" event occurs are always postulated after the fact...How did anyone know that the SP was not going to drop to 960...And who stepped in and bought it at 980 this morning or the NQ for that matter? Also, let's not forget that while the VIX at 30 is relatively overvalued there really is no upside limit to the range at which the VIX can move...Heck, it hit 55 in October of 1997 and we were still in a "bull" market...

I also agree with the contention that "capitulation" is a bull market phenomenon...The whole premise is that the weak hands or overleveraged longs are selling out because they cannot finance their positions...Those days have already come and gone..We have had so-called "capitulation" going on two years...Dumb money came and went more than a year ago...The money that is left is just sitting and waiting...The panicked longs are pretty much already out of the market...

In hindsight over the past two months, we can pretty fairly say that each bottom has basically been a buy to cover, which then is driven higher by a series of buy programs and different classes of speculators covering and driving prices higher in stealth rallies...Each of these rallies has been sold to lower lows...It appears to me that many of the "concepts" that from the bull market no longer apply...This is new unchartered territory with regards to how things "should" act...
 
If "selective" means that you are minimizing the number of trades you make, then you must also radically expand your drawdown and profit-taking criteria.

You will have to endure considerable pain, because you will NOT buy the bottom or sell the top. Unless you're buying option premium, you'll need a relatively substantial account for a modest
position.

It's a different approach to the same goal.

It IS possible to be a selective day trader or scalper.
 
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