Scalping In Volatile Times
Posted by Stock Online Trader in Watchlist on 02-10-2010
When the market is crazy and volatile with no clear direction, the best way to make money is to go scalping. Scalping invokes trying to achieve quick 20-30 cents gains and getting out.
To begin the day I shorted PCX @14.47, hoping for a breakdown. However after multiple attempts it would not break below 14.40. Not willing to risk a squeeze I covered @14.43. Turns out that was the right move. After that PCX spiked all the way to 15.20s. Later on in the afternoon I took a short position again @14.95. Once the 15$ mark was taken out, I was confident to go short with stop loss above 15. Turns out it was a good trade and I covered @14.74, gaining 21cents profit. Quick and nimble.
I found Diamond Offshore Drilling, Inc. (DO) while scanning for oversold stocks that were reversing back. I bought DO @86.65, hoping for a 1$ gain with stop loss at 85.90. After some initial back and forth, DO jumped to 87.30. I immediately raised my stop to 86.99 hoping for bigger gain. Unfortunately my stop was taken out. My execution was @87.03, giving me 38cents profit. I was aiming for 87.85 as selling point, below 88$ resistance which it eventually reached. However I got stopped out earlier. No regrets though
MEE is one trade I wanted to go long, but never did. It is notorious for crazy swings and I decided to play safe. I was aiming for going long on 39$ break. Had I entered the trade, I would have got a nice 50-60cent profit. MEE did fall back to 39 level. However I wasn’t interested the second time around since, it was trending down, unlike earlier when it was trending up.
