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Stocks vs other instruments


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Stocks vs other instruments

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  #1 (permalink)
 mdl060374 
Denver, CO
 
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I am bringing this up to clear up some things for me, and also to prehaps get insight as to why people choose futures, commodities over stocks. It seems like stocks trading has dwindled over time, and most of the journals you see revolve around the ES or CL or bonds or commodities.

It would seem that stock trading would offer more opportunity since the "universe" is vast, and you can easily scan for various criteria for opportunity. (Ie. average daily volume, average day range, or certain formations or behavior)
rageardless if you are a trend trader or fader or trade reversals..

SO I guess I am kind of confused as to what I am missing here. Why all he love for the CL and ES?

I understand that large institutions need to find such extremely liquid instruments to put their money "to work" but as far as the small(er) guy, why do they offer such an attraction? (From what I hear, the ES is the most difficult to trade and has the most fakes/chop..)

Also for those of you who DO trade stocks, how are you selecting them?

Are you looking for ones that are in the news? Are you just trading a handful based on recent average volatility? or are you "scanning" for price action or technicals or some other criteria and allowing the results to bring the opportunity to you?

If anyone has any insight please share. I just have a feeling I might be missing something here.

thanks

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  #3 (permalink)
asimsaim
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The best time for trading stocks is near board meetings, announcements, in which they anounce earnings , P/L etc.

Try to correlate the earnings announcements with the speculation for hiking up the price, if you can understand this thing, you are next Mr. buffet.

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  #4 (permalink)
 David_R 
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ISRG is in a large trading range. I was thinking it was done with its power move higher, but when I looked at the chart I noticed some large volume on a day last week. So far there has been no follow through to the downside and price is trading above that day with the large volume. Does that mean anything? I don't know. I think until it breaks down below the horizontal support in a definitive way, one ought to continue to think there is more upside. I also think it is interesting that earnings come out in mid April. It was be interesting to watch the behavior ion the mean time. My opinion is it will continue sideways and ultimately break higher. So I'm going out on a limb. We will see.

D

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  #5 (permalink)
 deaddog 
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mdl060374 View Post

SO I guess I am kind of confused as to what I am missing here. Why all he love for the CL and ES?


Leverage & ease of entry. You can open an account with a couple thousand dollars.
No Pattern Day-trader Rule.
Longer market hours.
Only one instrument to keep an eye on.
The profitable traders like it because there is a never ending stream of unprofitable traders to take advantage of.

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  #6 (permalink)
 deaddog 
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mdl060374 View Post




Also for those of you who DO trade stocks, how are you selecting them?

Are you looking for ones that are in the news? Are you just trading a handful based on recent average volatility? or are you "scanning" for price action or technicals or some other criteria and allowing the results to bring the opportunity to you?



thanks

I'm a trend follower so i scan for stocks that are trending. I add price and volume criteria to keep the list manageable. I then scan that list for technical set ups, and narrow the list with risk/reward criteria.

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  #7 (permalink)
 mattz   is a Vendor
 
 
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@mdl060374

Leverage attracts traders. This is essentially why most people trade it.

But, the business of leverage forces you to become very technical, chart oriented and look for areas of support and resistance. This could help you tremendously across none leverage products like stocks.
I find that highly capitalized traders trade both.

Matt

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  #8 (permalink)
 mdl060374 
Denver, CO
 
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deaddog View Post
I'm a trend follower so i scan for stocks that are trending. I add price and volume criteria to keep the list manageable. I then scan that list for technical set ups, and narrow the list with risk/reward criteria.

I assume you trade intraday, are you looking for intraday trends? or are you looking for more macro trending (dailycharts) stocks, then making decisions off them?

THe reason I ask is that often, it seems that once a trend gets established intraday, the move has been made, the stock usually flatlines or even retraces slowly as it loses momentum.

THe one thing I don't like about stocks is the whole gapping issue.. It makes taking advantage of intraday moves much more difficult, b/c a stock can move +/- a decent % opver the course of 3 days, but a lot of that move gets priced in b/w the close and next days open, making it untradeable unless you want to assume overnight risk..

That alone makes me think about giving up equities.

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  #9 (permalink)
 Fadi 
Luxembourg
 
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Nah, use equities for investing long term instead. Research your companies, own those that you like, in which you see and project yourself...

It is good practice to invest a fixed amount each month on your favorite 5 or 10 companies, and feel like a business owner. Sooner than you could imagine, you will find yourself with some important shares in these companies nonetheless, and it would pay for the long run more often than not!

Then dedicate futures for intraday scalps, trade and beat the hell out of them. No affection, no affinity, nothing that attaches you to any of these contracts just short term milking cow!

Finally, swing forex for a couple of days/weeks holding small positions overnight, and with time you will also end up with a mix of foreign currencies in your account that will auto hedge against those foreign fluctuations. And that adds a touch of international feel to your finances

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  #10 (permalink)
 Fadi 
Luxembourg
 
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mdl060374 View Post
I am bringing this up to clear up some things for me, and also to prehaps get insight as to why people choose futures, commodities over stocks. It seems like stocks trading has dwindled over time, and most of the journals you see revolve around the ES or CL or bonds or commodities.

SO I guess I am kind of confused as to what I am missing here. Why all the love for the CL and ES?

Simply a search for instant gratifications, mostly by undercapitalized retail investors
But stories of mishaps and disasterous ends are more frequent than one could envision...

Successful people will do what unsuccessful people won't or can't do!
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  #11 (permalink)
 deaddog 
Legendary Market Wizard
Prince George BC Canada
 
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Trading: Stocks
 
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mdl060374 View Post
I assume you trade intraday, are you looking for intraday trends? or are you looking for more macro trending (dailycharts) stocks, then making decisions off them?

THe reason I ask is that often, it seems that once a trend gets established intraday, the move has been made, the stock usually flatlines or even retraces slowly as it loses momentum.

THe one thing I don't like about stocks is the whole gapping issue.. It makes taking advantage of intraday moves much more difficult, b/c a stock can move +/- a decent % opver the course of 3 days, but a lot of that move gets priced in b/w the close and next days open, making it untradeable unless you want to assume overnight risk..

That alone makes me think about giving up equities.

No. I only swing trade. I usually hold for a couple days to 2 weeks or more. Iím considering adding a time stop to my strategy but havenít yet. Iím not sure of an optimum time to give a stock. If I have a day trade it's because my stop got hit the same day as I entered.

Ya, gaps present a challenge. For that reason I don't hold a stock during earnings announcements. News caused gaps are part of the business. Nothing I have control over so I donít really worry about them. My experience is about 50/50 in my favor. However I end up taking bigger losses on gaps than my plan calls for.

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