Stocks can only go two ways: Up or Down. So why couldn't a person trade the most active (i.e big price swings) stocks like the top 10 Advance/Declines and just use a mid range stop and be profitable. These stocks usually have HUGE volume and move 10% up or down after the open so you have a decent chance of catching a big move. Yes, you are going to get whipsawed often and maybe even stopped out 3 of 5 times but your 2 profitable trades will be huge winners. Is this a valid idea? Just a thought.
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Simplicity
- Thread starter learn&earn
- Start date
I have been but im only 3 trades in. 2 stop outs and an 11% gain. so far so good.
Quote from learn&earn:
Stocks can only go two ways: Up or Down. So why couldn't a person trade the most active (i.e big price swings) stocks like the top 10 Advance/Declines and just use a mid range stop and be profitable. These stocks usually have HUGE volume and move 10% up or down after the open so you have a decent chance of catching a big move. Yes, you are going to get whipsawed often and maybe even stopped out 3 of 5 times but your 2 profitable trades will be huge winners. Is this a valid idea? Just a thought.
Expectancy = zero.
But test it anyway. You will surely learn something.
However if your stocks are very volatile and loosely correlated, you might be successful at pumping volatility out of them.
Ninna
Quote from nLepwa:
Expectancy = zero.
But test it anyway. You will surely learn something.
However if your stocks are very volatile and loosely correlated, you might be successful at pumping volatility out of them.
Ninna
Respectfully how do you figure the expectancy is zero when the winners are so much larger than the losing trades? You may be correct just wondering how you got the conclusion?
how were you cherry picking your trades? I have been waiting till about 10am (height of the bubble) and then getting in either short or long. Seems possible.
Quote from learn&earn:
Respectfully how do you figure the expectancy is zero when the winners are so much larger than the losing trades? You may be correct just wondering how you got the conclusion?
Let me give you an example.
We play a game several times. If you give me a correct answer, I give you $85. if you give me the wrong answer you give me $15.
You get the answer right about 1 time out of 100.
What's the expectancy of your wealth?
Ninna