StockFetcher Forums · General Discussion · Follow the Indices<< >>Post Follow-up
welliott111
98 posts
msg #54615
Ignore welliott111
9/6/2007 8:57:41 PM

I've read from several different sources(books,mags,blogs,SF forums)that the key to a winning strategy is to follow the trend,follow the market.Would it not cut a lot of risk if you just traded the major indices(QQQQ,DIA,SPY)?With individual stocks you have earnings,company news(under-the-table-accounting & backdating stock options are just a few),product recalls and countless other things that can throw you a curve without warning.On the filters I've been studying,the winning trades are usually on up days or spikes in the overall market. Running your succesful filters on the major indices and using put and call options seems less risky,if there is such a thing,than individual stocks.Does this make sense?


welliott111

maxreturn
745 posts
msg #54626
Ignore maxreturn
9/7/2007 8:39:37 AM

Welliot...this is in fact what I do. Most of my trading is done trading puts and calls on the SPY. Although I do speculate from time to time trading options on individual stocks. Most of my success has come from trading the SPY. The key is waiting for high probability opportunities to present themselves and not trying to trade each micro bottom and top.

welliott111
98 posts
msg #54628
Ignore welliott111
9/7/2007 3:43:43 PM

Thanks for response maxreturn.Do you have a good formula for "high probability opportunities" or just feel the market? I find that RSI(2)<10 and wait for Slow Stochastics(5,3) fast line to cross slow line as a good entry point. On short side,RSI(2)>90 and stoch.fast cross below slow line. Even MACD crossovers under 0 seem good entries on long side, though few and far between.These may seem simple strategies to other traders,but sometimes simple is good if profitable,especially for rookies like myself.

Best of luck
welliott



maxreturn
745 posts
msg #54629
Ignore maxreturn
9/7/2007 4:42:02 PM

Hello Welliot. I have developed what has been a very effective methodology for me to "swing trade" the SPY off the daily charts. As mentioned before I strictly trade long puts and calls when the timing is right. After years of trading and researching indicators here's what works the best for me: 1) For technical tools I like the MACD and the 50 and 200 period EMA's. I also utilitize Fib levels and support/resistance levels. 2) For help in timing high probability turning points I combine the VIX with my own proprietary breadth indicators applied to both the weekly and daily charts.

nikoschopen
2,824 posts
msg #54633
Ignore nikoschopen
9/7/2007 10:49:43 PM

Unfortunately, trend isn't so predictable as it might appear in hindsight. No doubt, in the next six months, I will be kicking and screaming at myself for not having sold every possession I have and went long the market. By then, you and I would clearly see that the Dow is hovering near 20,000, thanks to many mitigating circumstances including the series of drastic rate cuts implemented by Bernanke & Co. As a result, mortgage cum credit crisis has become a nonevent and I, on the other hand, lost my shirt. Had I only known...

welliott111
98 posts
msg #54638
Ignore welliott111
9/8/2007 12:46:32 PM

Thanks for info guys.I think the "Indices Strategy" might work for short swings as well on SPDRS, but there is usually minimal volume in them. I'm concerned it would be hard to get in and out easily. On 9/7 volume in XLY was 8.9m, but total in-the-money puts volume was less than 200. Anyboy trade the SPDRs?

nikoschopen
2,824 posts
msg #54640
Ignore nikoschopen
9/8/2007 2:48:12 PM

ETFs (SPY, DIA, & QQQQ) are for sissies. Big boys stick with the index futures. lol

Just kidding. But the futures do have bigger moves than their ETF brethren, which means, well, larger profits if ure right and ultimately bigger losses if ure wrong.

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