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Minimum Volume
- Thread starter GIG
- Start date
Ok, sometimes I'm a smartass. The point of my post was to show that there are many many ways to trade and make money, but most people continue to only care about the large cap IBM's, HD's and EBAY's of the world (and the emini). That piece of pie is being grabbed for by everyone and their brother and even the crumbs are hard to snap up now. Sure there's money to be made there, but I decided not to listen to the sayings that you can't make money such and such a way or you can't trade a stock that thin or whatever and just look for ideas with an open mind in places no one else is interested, or to look at a worn out idea from a different perspective.
To me minimum volume doesn't necessarily mean anything. But it obviously depends a great deal on how you trade.
And yes, that's a real position, and no it's not a penny stock. It's also not a standalone position, but is part of a larger, hedged portfolio. It usually only takes a day or two to work into a position like that, but can take weeks to get out.
To me minimum volume doesn't necessarily mean anything. But it obviously depends a great deal on how you trade.
And yes, that's a real position, and no it's not a penny stock. It's also not a standalone position, but is part of a larger, hedged portfolio. It usually only takes a day or two to work into a position like that, but can take weeks to get out.
Quote from CalTrader:
LOL LOL ....
If you think this figure is funny then state your criteria. If you trade purely on support and resistance and pay no attention to the liquidity of the issue then tell us how you get realiable entry and exit points.
We have made some good trades in 1 M average volume issues so I'm not sure why you think this is a funny criteria.
Thank you for your instructions.
I pay attention to liquidity. It is a primary criteria for me. So is the float. The minimum volume for me is called DU volume. I use this as a way to get my hot list for the week.
Stocks in DU are the ones I monitor to buy usually an hour or so before price breakout or during price breakout.
I trade into a postion that is larger than the thread beginner. And I hold for 6 to 8 days. Nowadays the hold is shorter usually (3 to 4 days).
The average volume on 65 days is a joke to me. When I enter a stock it is leaving DU and going to a peak volume, I sell at the peak volume. I sell going into the high of price, across the high and try to be finished getting filled by the end of the price peak.
I never trade more than 10% cummulative volume on entries or exits for the day I either enter or exit.
I trade 3 beta stocks mostly and their combined EPS and RS percentiles are over 80 each these days.
The number of shares I hold is limited to a multiple of what the shares is that the thread originator posted.
The 1,000,000 shares is obviously a joke to me and it will always be. My PnL for default purposes is attached. Clearstation has a default of 1000 shares. I have not traded 1,000 shares in recent memory, meaning over 25 years.
Attachments
Quote from Grob109:
The 1,000,000 shares is obviously a joke to me and it will always be. ...
Yes, some of those issues are of of interest to us. However, longer term holds represent risk and that needs to be factored into trading models. Moreover, the inability to get reliable exits also has to be factored into the trading model. For thinly traded issues the ability to predict your exit price is very poor. I might take a position in certain cases in these types of issues but the amount of capital tied up in these trades would be small unless the basis of the position was something beyond simply trading ....
Remember THV, I had 150,000 of that and it traded about a k a day also.... LOL
I think you need to define what kind of trading you are doing. If you are talking position or swing trades, volume can be thinner. If you are talking day trades, thin volume and wide spreads can eat up a profit quickly.
Even in swing trades, I look for a minimum of 500K when I trade lots of 1-5K. Thin stocks can move against you quickly, and you can lose a lot when you try to exit. Of course, there are those who would say that they can move in your favor quickly also - it is all about risk/reward.
Bottom line - if I am day trading I want at least 1M as a 30-day average. Swing trading, at least 500K.
Peace dawg.
Even in swing trades, I look for a minimum of 500K when I trade lots of 1-5K. Thin stocks can move against you quickly, and you can lose a lot when you try to exit. Of course, there are those who would say that they can move in your favor quickly also - it is all about risk/reward.
Bottom line - if I am day trading I want at least 1M as a 30-day average. Swing trading, at least 500K.
Peace dawg.
Quote from CalTrader:
.... well then I guess all that volume in the nasdaq, nyse, and derivatives markets is just wasted.... and of course everyone is losing money - except you..... wait while I dump all our trading strategies and switch over to penny stocks because the people trading those are the only people making money .....
Elite Trader is truly a Hilarious group of people .....
I assume you believe that in the stock market, most people make money and the minority lose money.
Dont know how that works out mathematically.
Quote from lescor:
Ok, sometimes I'm a smartass. The point of my post was to show that there are many many ways to trade and make money, but most people continue to only care about the large cap IBM's, HD's and EBAY's of the world (and the emini). That piece of pie is being grabbed for by everyone and their brother and even the crumbs are hard to snap up now. Sure there's money to be made there, but I decided not to listen to the sayings that you can't make money such and such a way or you can't trade a stock that thin or whatever and just look for ideas with an open mind in places no one else is interested, or to look at a worn out idea from a different perspective.
To me minimum volume doesn't necessarily mean anything. But it obviously depends a great deal on how you trade.
And yes, that's a real position, and no it's not a penny stock. It's also not a standalone position, but is part of a larger, hedged portfolio. It usually only takes a day or two to work into a position like that, but can take weeks to get out.
So very true.
I've been making my best trades in stocks where there is only 2-3 other traders in. Much easier to scalp a market short when there aren't any idiots constantly limiting out 1 penny below the offer.
Quote from praetorian2:
Remember THV, I had 150,000 of that and it traded about a k a day also.... LOL
Sure ... these types of plays can make money. AMR was one that comes to mind although this issue was/is not what I call thinly traded. Like I said, you need to assess the risk of the position. To us the risk equation gets a parameter representing the ability to get filled at a particular price: other factors would have to cancel this out - which does happen.
Quote from CalTrader:
Yes, some of those issues are of of interest to us. However, longer term holds represent risk and that needs to be factored into trading models. Moreover, the inability to get reliable exits also has to be factored into the trading model. For thinly traded issues the ability to predict your exit price is very poor. I might take a position in certain cases in these types of issues but the amount of capital tied up in these trades would be small unless the basis of the position was something beyond simply trading ....
Your continuing commentary on my views is priceless.
Yes long term holds are riskier. You never hold beyond the period of capital appreciation that your entry began. That is de facto for making money with a high money velocity of capital appreciation. there is no hold ever longer than that for making money. My PnL shows beginners operating at 30% a month so that is a minimal ball park to start with. If you long term hold drops below 30% a month you are in a risky place at a minimum.
The primary risk is time value of your money being lost and not recoverable for starters.
Reliable exits are determined by your universe of stocks. There are none there that are unreliable for anyone who is making money. People do not go to an unreliable place. It is risky business. Never go there.
I assure good results by using a DU (Dry Up) volume that services my exit. See my post that responds to you. Here is an example at the limit of my capitalization of a stream of capital. I use 200,000 shares minimum for DU that is it and it is always in place . Period. When stock breaks out on volume, that volume is reached within 2 hours of open. I buy continually in blocks that are the size of blocks going through T&S using the max size block. Also, I do not buy more than 10% of the trading cumulative volume that day. This is complex for some people and beginners do not have my problems to deal with. I max out at 100,000 shares as an absolute maximum in any one of my trading streams of capital. This, in a practical example, took 20 partial fills. A long task as I said. Now I have to exit on a day I choose. I choose and I repeat the process on the way out. On that day it turned out the peaking volume was high. I slogged through the rise to the peak, across the peak and a little ways down the other side of the peak. 4 1/2 hours to get 100,000 shares sold. It took 31 trades. Average entry price 11.00 average exit 28.00. Peaking volume: 1,100,000 shares. Peaking means maximum. You sell on maximum volume days. You buy AFTER DU volume occurs during FIRST TWO HOURS of DAY.
1,000,000 million shares is a joke as a minimum volume. Why?
It is too big!!!!!!!!!!
Prediction that you employ is bullshit. All prediction is bullshit. Why? Because it is unnecessary. Never do anything that is unnecessary it sets up pictures in your mind that you can do something that is not possible at all. Having pictures of stuff that is unreal in your mind is an absolutely stupid thing to be practicing. Do not predict, ever.
Your last point is not even rational. Do not put stuff like that in an investing context. What you say is not remotely related to investing. That capital and it's use is terrific. It is not investing and do not include it in anything that is part of investing. especially risk and money management.