Reading this made me smile Amit because I remember when I day traded stocks throughout 2008 and, like you, I steered clear of these for much the same reasons as you state here. That was until Naz showed up singing the virtues of POT. At the time (early summer 2008) I think it was around the $140 mark and could easily move 5-6 dollars a day. Sometimes more. Using ATR the same way as you and Richard use it, I was able to place a wide stop and traded very small size, often less than 50 shares. I loved it. I absolutely loved it. At the end of the year, IB (who was my broker at the time) produced all manner of trading stat's. Guess which stock was my most profitable - and by a very wide margin? Yep, it was POT. When the crash came in the autumn that year, POT's price halved, along with the spread (often 15-20 cents). And I stopped making money on it. Gutted I was, absolutely gutted! Anyway Amit, you're waaaaaaaaaaaay more skilled and experienced at trading stocks than I ever was so, far be it for me to tell you what to do, but you might like to have a go paper trading the big volatile beasts with wide spreads and huge ATRs. You never know, you might just be very pleasantly surprised!
Tim.
PS. Please note that my comments do
not apply to inexperienced traders who don't have a solid understanding of the dangers of wide spreads and huge volatility in high priced stocks!
