How are YOU making money in this market?

[stock_punter]

I thought it'd be interesting to hear how the EliteTraders among us are making money in this market.

If you are one of the lucky few, how about sharing with us your:

+ Vehicle selection criteria
+ Entry rules
+ Exit rules
+ Position management

As for me, I have been treading water the past few months. Slight positive bias, but nothing to write home about. My stock selection and entry rules are based on the Jeff Cooper and Dave Landry pattern setups (you can find more info on them via their books; see amazon.com or tradingmarkets.com).

I exit using trailing stops on the support and resistance levels on the 5 minute charts. In this current market I am risking much less than 1% of my capital on each trade.

I look forward to hearing how you do your stuff.

-- Punter.

 

[Babak]

I find that the large range days in a stock are usually event driven in these quiet times. Since I need volatility that's where I've been for a while now. A good example would be COCO's recent swan dive.

 

[praetorian2]

Babak, funny thing on coco, is you probably made way more than me by shorting it, but I've picked almost 7 pts net to the long side in the last 5 days on 3 trades. Different styles, but both successful results. I'm presonally just playing the bounces. Unfortunately, the bounces lately aren't that significant, or at least this last week, but it can't really get much worse. I'm basically treading water this last 6 weeks or so. My account has vascillated within a 30k range or so, and I'm about where I started about 6 weeks ago. I was doin ok for a bit, but blew about 20k on stupid pvn (but the verdict is still out on the calls I have). Last month I did poorly, and I assume that this month will probably be another flat one at this rate, or slightly down (but it's early still). These monster down days are just impossible to fade... And I hate shorting on a day that the market is down 100 pts on the open.

 

[tntneo]

+ Futures (NQ and soon ES)

+ S/R and True Range trading
very small targets (even 1.5 smaller than in a normal market)
To be clear, I was out the last 2 weeks because I moved. Volume is back so I should have more fun now, than in august (very good for me).

+ purely intraday. no overnight. 10 round trips and more a day.

+ positions are fixed in size, and risk under very strict control (how could you do otherwise with futures). I focus on win ratio stability and my composite R multiple is between 3 and 5 depending on market conditions. The composite R is calculated with the win/loss ratio, so the higher the wins the higher a positive expectancy is amplified thus the 3-5.

As stated in other threads, I wasted a lot of time with stocks for the past year. I used to scan and use setups and all that, then got fed up of all the work it takes and massive monitoring to do. I knew from the company I worked for that other instruments made more sense for INCOME.

I tried QQQ, it was OK in the beginning but then slippage and commission pushed me back to break even while I knew my system had to bring some greenies.

Then I finally gave a try to futures (after all, I was using the futures feed to trade QQQ), and BING ! Ka-Ching ! Finally back to great success, just like in 1999 when everything was easy. But it's 2001 and many suffer a lot, so this move is probably the most important I made. It is easy to make money when everyone does. You know you made it in the business when you hear whinning everywhere and your bank account just keeps growing.

You know, maybe I was just not cut for stocks. Maybe many are not cut for stocks and should try something else. But that's just my opinion. Now that I do index futures, I hear others having an even easier time with longer time frame and currencies. Probably a trader should be flexible and concentrate on making money, not on the instrument. Any bidding market follows the same rules of mass psychology, so you should be able to trade any. Of course each market has its own inefficiencies, and that's what you should trade on. And sometimes inefficiencies which worked for traders just don't anymore, they're gone.
Maybe that's what happened to stocks, again, maybe it is just me. But you were asking about how are YOU making money, so that's my way.

On final note, I should add that I use massively system trading. The system is built from MY trading not something I bought. Therefore it follows all my rules and exceptions. In this market you must be super consistent in your rules or patterns and risk management.

neo