Trading Nasdaq Stocks - scary or what ?

alanb41252

1
264 0
I have recently started trading Nasdaq stocks through IB after a first few months of reasonably successful spread betting on the FTSE and Dow.

I have previously monitored Nasdaq stocks, have been an avid reader of posts on this page, read a few trading type books on TA and pyschology etc and attended a 121 session for 2 days with Nas.

My previous trading experience was trading aluminium and copper on the LME for several years.

Nothing prepared me for my first week of trading Nasdaq stocks. Although I have avoided disaster and come out pretty unscathed, my first week has left me breathless, stressed and unsure if this is what I really want.

I have discovered the rapid action of Nasdaq stocks and have been amazed at the speed with which the price can change by a very large amount. Some of those 5 minute bars are pretty b****y long !!

Sure, there is money to be made with these price movements but there is also money to be lost.

How do you Nasdaq traders out there cope with the frequent and violent price moves ?

Any advice and tips would be appreciated.
 

Trader333

Moderator
8,655 981
Alan,

A lot of this is down to having the correct order routing ready for transmitting immediately if the market moves against you. Once in a trade I only look at the Level II and Time & Sales screen with my hot keys ready to exit in a flash

Also I tend to enter trades where violent swings are not immediately probable. Which stocks have you been watching and how have you been going about placing your orders ?


Paul
 

alanb41252

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264 0
Hi Paul

I have been looking at "gappers" mainly - stocks that gap up or down at the open.

Also looking at some Chinese internet stocks plus Yahoo, CDWC, JBLU etc . Anything and everything really !

On the order front, I have been entering various orders, ready to hit the buy or sell key to exit. But you need to be careful doing this as it is easy in haste to transmit the wrong order - which of course I have done on occasions.

I think it is a question of concentration, focus and organisation.
 

dax

Junior member
49 1
A lot of US stock traders trade NYSE stocks - tend to be very liquid and usually bigger market caps than Naz stocks. You might want to pull a few charts up and see if they fit your style.
 

Naz

Experienced member
1,391 24
Alan look at my SINA trade on the October US equity trading thread.

Nice and gentle.You should know the reasons i took it.If not email me and i'll talk to you about it. [email protected]

You get used to it.After all if they dont move you cant make any money.
 
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alanb41252

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264 0
Naz.

Yes, I understand that trade and it was a very sweet trade.

But it doesn't always happen as nicely as that and there can be a very violent swing along the way which shakes you out - and shakes you up !!

Something that I will need to get used to I suppose. ie. the knowledge that just about ANYTHING can happen at ANY TIME.
 

Naz

Experienced member
1,391 24
Good luck Alan,just take it easy with a hundred shares.Call me any time.

Naz
 

Grey1

Senior member
2,186 178
Alan ,

A lot of discomfort of fast moving stocks comes from your risk toloration... I strongly advise not to risk any of your cash until you can analyse the risk of each trade.. The good news is it is all common sence and you donot need to be a rocket scientist..

Time is 5.19 now take a look at FLEX hedged against T.. very low risk trade
 

Grey1

Senior member
2,186 178
this is the quick chart of the trade
 

Attachments

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alanb41252

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Ok, in a nutshell - how would you analyse the risk in any given trade ?

You can go over charts for a particular stock until you are blue in the face but still the unexpected and "impossible" can happen.

Presumably it is a case of assessing probabilities based on past performance, plus what is currently going on - ie. company results, interest rate hikes etc etc.
 

Grey1

Senior member
2,186 178
Alan,

One can 't measure risk unless he has a bench mark to measure price.. I have out lined the mean trading and its implications on Risk of each trade in the US oct thread and many other threads if you wish to search for them .. just trying to help


Hope you are watching the pair trade I posted above in real time..
 

Mr. Charts

Legendary member
7,370 1,194
alan41252,
There are many ways of trading Nasdaq stocks, some fast and furious, some rather more gentle and relaxed, and approaches which are in between the two.
You really need to find the way which suits your own personality so you can blend together the "soft" methods and the "hard" methods into a successful trading strategy which you are comfortable with.
For example, Naz has his own excellent methods and I have mine, which work for me.
I like pattern trading, with news analysis, gappers, movers and shakers and my own core stocks to find the great moves. This is integrated with tape reading and also I do use level 2 some of the time.
You need to find your very own way, but it sounds as if you're getting great support.
 

Mr. Charts

Legendary member
7,370 1,194
Looking again at your initial post on this thread, perhaps it's worth considering reading momentum so you can learn how to exit a trade when it turns against you in addition to tracking level 2 players. Only in my humble opinion, of course.
Horses for courses etc.
 

alanb41252

1
264 0
Thanks Mr Charts.
Yes I think trading style is a very personal thing and I have to spend some time to find "my way " to trade.
 
 
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