Big Volume Sparks Frustration

Sites are going down on the excess volume. The screens can't keep up with the volume.

While all of this trading activity is a godsend for CME (CME - commentary - Cramer's Take) and NYSE Euronext (NYX - commentary - Cramer's Take) (on its call, the latter said July was huge), I have to tell you that it is not good for the average investor.

When a site is down, when prices whip around, most regular people I deal with are getting really fed up with the market. I am willing to bet that when the smoke clears on TD Ameritrade's (AMTD - commentary - Cramer's Take), E*Trade's (ETFC - commentary - Cramer's Take) and Schwab's (SCHW - commentary - Cramer's Take) trading numbers, we are going to see some downturns as we did at the end of February.

I say, don't be fed up, but do use limits. All of these great firms let you use limits. You can protect yourself from the exaggerated moves, which are mostly caused by the futures in Chicago and the exchange-traded funds, all of which translate and are translating poorly into individual stocks. These, plus the SEC's poorly timed decision to allow traders to knock stocks down, create actual bear raids because they no longer have to wait for a higher price than the last one. (The uptick rule is explained very well in an upcoming piece by Mark Horrell, a new guest contributor to Stockpickr.) That has created a totally treacherous trading environment.

Protect yourself. If you want to buy a stock, you have to use even wider scales than usual -- read Real Money the book for this strategy -- and you need to buy in much smaller amounts at specific levels.

You want to try to buy MasterCard (MA - commentary - Cramer's Take) in this environment, 100 shares, you buy 25 at $140 and then 25 at $135, that kind of thing. Under Armour (UA - commentary - Cramer's Take)? You need to buy this one? You buy 100 shares at specific prices on the way down where you can take advantage of the short press and the futures' whippiness and get a better basis than you would have otherwise.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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