Home > Market Set Up > How Does an Active Trader Handle This Market?

How Does an Active Trader Handle This Market?

Ever since the “Flash crash” on May 6th, the markets have gyrated like a rubber band – no doubt fooling the “retail investor,” who typically buys high and sells low, ultimately chasing each and every move. The buy and hold strategy of years past has proven to be unsuccessful. In these markets, where some say as high as 80% of trading is computer driven (algo trading), it is more pertinent than ever to become more of an “active trader.”

At Keystone Trading, 85% of our trading is done on an intra-day basis. In other words, the positions are closed by 4pm EDT. The other 15% of our trades are in a 1-3 day time frame. Put simply, we are profiting from the short term moves, rather than sitting back and watching profits turn into losses. We are consistently monitoring order flow and looking for “high probability” situations.

As an active trader, we rely heavily on technical analysis rather than company fundamentals. Las Vegas Sands (NYSE: LVS), for example, happens to be one of the stocks that we watch closely and trade aggressively. Technically speaking, the stock has been a beast since early March, when it was trading at around $16.50 a share. It traded as high as 26.55 before the flash crash, only to regain steam after finding support at $19 and make a new high of $27.85 on June 21st. However, once it failed to hold the support level at $25.50, we quickly sold out of our long positions and shorted the stock, setting our stop at $26.59 with a profit target of $22.73. In other words, we were willing to risk $1.09 to make $2.77 on the trade. LVS hit our price target today and we covered for a nice profit.

Do all of our trades work out this well? Of course not. But the important point is that we always calculate our risk-reward dynamic before we enter a trade. Typically, we look for at least a 2:1 ratio. The key element to an active trader is to be constantly assessing probabilities and market conditions and only to take trades when these factors line up. We never trade for the sake of trading.
As a proprietary trading firm Keystone Trading Group seeks partnerships with both new and experienced traders.

Our traders trade exclusively for the firm’s own account and are provided with the proper resources to grow their trading business.

Experienced traders with a documented proven track record will be allocated firm capital to trade.

Firm capital allocation and risk management parameters are based upon experience and performance.

Aspiring professional traders and/or those that lack a documented track record can earn a trader position with Keystone Trading Group upon successfully completing a KTC (Keystone Trading Concepts) training program.

All trainees in the mentor programs will be allocated firm capital to trade while being instructed and coached by seasoned traders. Keystone absorbs any trading losses

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