What is a good way to take advantage of volatility

[spindr0]

Quote from 5yrtrader:

sell options

Just sell out-of-the-money calls and puts, sit back and collect premiums, you will be on the beach in no time.

If it was that simple, there'd be no one living inland,

 

[abattia]

Quote from DHOHHI:
... ATML, SANM, PMCS ...

Why do you chose these stocks?

Thanks.

PS. Oh, sorry .... another question ... Have you noticed things getting more difficult for you with this strategy over the last 4 - 6 years?

Thanks, again.

 

[intradaybill]

Quote from never lose ever:

Very simple. I'm not looking for any long term investing advice or formula's just very simply how can I make the most out of the volatility in a stock. How can I find entry point's and exit points?


I know it's a basic questions but still

It is basic as you say. Measure the volatility and the direction of the trend, if there is one. I am not going to tell you how. This is your homework. Then, if volatility is let's say X points and trend is up, go long with 2X/3 target and 5/4X stop. I am not going to tell you how and when. You figure that out. It works for me. Very well.

 

[DHOHHI]

Quote from abattia:

Why do you chose these stocks?

Thanks.

PS. Oh, sorry .... another question ... Have you noticed things getting more difficult for you with this strategy over the last 4 - 6 years?

Thanks, again.

I trade those stocks since they most always have a decent intra-day range - are lower priced stocks (so you can trade decent size) and they're ones I've come to "know" in recent years. If you trade the same stocks over and over for an extended time you have a gut feel as to what kind of moves you'll see from day to day. Sure, news can come out that'll exacerbate moves at times but more often than not you have a sense of what to expect just watching the major indexes and the SOX (in this case).

 

[spindr0]

Quote from DHOHHI:

I trade those stocks since they most always have a decent intra-day range - are lower priced stocks (so you can trade decent size) and they're ones I've come to "know" in recent years. If you trade the same stocks over and over for an extended time you have a gut feel as to what kind of moves you'll see from day to day. Sure, news can come out that'll exacerbate moves at times but more often than not you have a sense of what to expect just watching the major indexes and the SOX (in this case).

That's good advice. Sooner or later everything bites ya but sometimes you can get lucky and stumble onto something that channels for a good stretch of time.

 

[abattia]

Thanks.

Quote from DHOHHI:

I trade those stocks since they most always have a decent intra-day range - are lower priced stocks (so you can trade decent size) and they're ones I've come to "know" in recent years. If you trade the same stocks over and over for an extended time you have a gut feel as to what kind of moves you'll see from day to day. Sure, news can come out that'll exacerbate moves at times but more often than not you have a sense of what to expect just watching the major indexes and the SOX (in this case).

 

[5yrtrader]

Quote from spindr0:

If it was that simple, there'd be no one living inland,

Oh sorry, I forgot the picture

Thats Laguna beach no less

5yr

 

[PocketChange]

With liquid volatile swinging instruments your entry and direction do not matter. You have a 50/50 chance of picking the direction and hitting equal distant exits and stops.

It boils down to scalping oscillations and managing positions (scaling size, reversing, taking profits).

I personally like front loading risk and draw down for active instruments. Ie. flip flopping sides from your initial entry inside a tight range, scaling size, playing breakouts.

Its a fast profitable game when price is moving.