Are stocks easier than indices ?

schoe

Well-known member
343 3
I was reading a thread on Elitetrader this morning from someone who said it is a lot easier to make money from trading US Stocks than it is by trading the Dow or the S and P because the indices are very choppy intraday and unpredictable. He couldn't understand why smaller traders would want to compete with the big boys trading the hardest money competition ([email protected]) in the World. I am inclined to agree with him but what do others think and what US Stocks do you think trend the best ?
 

growltiger

Member
91 0
Choppy trading

Unless you pick stocks which in general display lower volatity than the index you are presumably going to be riding more of a tiger by trading individual stocks than by trading the index they compose. Diversification may then get you out of trouble, but the portfolio performance will asymptote towards that of the index as the diversification increases. Meanwhile, you have multiplied dealing costs and the complexity of your trading. On the other hand, the idea of actively trading low-volatility stocks seems strange. Also the idea that indices behave more choppily than individual stocks is one that does not seem to chime with experience. But I could be wrong about all this.
 

schoe

Well-known member
343 3
Thanks Neil, I have had tuition from Mr C and Naz just wondered what others thought?
 

Mr. Charts

Legendary member
7,369 1,185
Don't forget, schoe, anytime you want advice just let me know; I'm always very happy to help you all I can.
Richard
 

Naz

Experienced member
1,391 22
Hi Schoe,

You already know the answer from me.I believe you only make profit from something that moves and if you do your homework and use a scanner you should be homed in on stocks that are poised to move.
Nasdaq stocks move.Get the right ones and they'll move more than any index.

Good luck.

Naz
 

BBB

Experienced member
1,071 3
This is true Naz. I guess it depends if you are looking for occasional valid signals for potentially large moves, or to develop a method that aims for a higher number of smaller wins/moves. Probably depends on if you have the discipline to sit around for a big move, or feel better with a more active approach. But Im talking approach here, not asset classes.
 

Ertai

Junior member
11 1
Why daytrade US stocks?

Swing trading US stocks is probably easier than daytrading, and even more profitable in the long run..

NASDAQ semiconductor, software and biotech stocks (gaming software stocks are going great now)
 

JonnyT

Senior member
2,560 22
The Indices are a nightmare and a trap for Joe Public.

Much better are Forex and Nasdaq Stocks. Both move.

If it aint moving then don't trade it as you are likely to end up losing.

JonnyT
 

Naz

Experienced member
1,391 22
I think there is some very good money in going for the intra day swings in Nasdaq stocks.They are so cheap to trade, for me even if you're going to run a position for several days its better to be out at the end of the day to save any problems with the market or stock gapping overnight.

Then you get in the next day and continue another intra day run.So a three day run could be made up of 3 intra day runs.With the position protected every night.
 

elliottmillion

Junior member
29 0
in my experience, i have used indices to get the gambler out of me!

whilst trading us stocks and uk stocks i have the occasional bet on the indices to keep me out of trouble, and to satisfy that gambling urge that i feel in this job.

does anyone else do this?
 

Rhody Trader

Senior member
2,620 266
I've day/swing traded index futures with some success over the years (though I haven't seen many good set-ups lately for my particular strategy). I've taken to focusing more on the options side, though, and sticking with individual stocks. The options cost less and, as a result, tend to have more short-term punch than options on the indices.
 

Rhody Trader

Senior member
2,620 266
The base initial margin requirement for US stocks, as set by the Fed, is 50%. Brokers, however, can go higher in particular shares if they are deemed excessively volatile. I believe this applies long and short.

Note, however, this is for positions carried overnight.

Don't know the specific policies on day trading. I've heard it's much lower, but cannot speak from experience.

Maybe someone else can chime in.
 
 
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