These days, every day in the market is an adventure. But some daytraders are making a killing, taking advantage of wild market swings that have scared off even strong-stomached investors.

The Dow industrials have traded in a range of 400 points every day in the last five days, while the CBOE Volatility index <.VIX> has more than doubled from a recent closing low on July 22.

Fear has increased alongside signs of slowing growth and an unprecedented downgrade of the U.S. credit rating by Standard & Poor's. But swings have gone both ways: the S&P recently posted not only its worst day since 2008, but also its best.

I trade the way the market tells me. And if you're like that, this is one of the best markets you'll ever have, said Joe Donohue, money manager at Dimension Trading in Red Bank, New Jersey, a proprietary trading services firm.

Donohue said his focus is more short-term to play this market. A few weeks ago he held positions for two or three days, but now he closes out positions at the end of a session.

If you need to play, be squared out at the close, he said. Don't carry much exposure overnight because you could be long and then have a 400-point drop at the open ... We're in such a risky market that anything could come out of Europe or Asia to change things completely.

Daytraders take a short-term outlook on the market, holding positions for less than a day. They often sell securities short to profit from both upward and downward movements, bringing the chance of big wins, or equally large losses.

Donohue said he primarily traded in the Direxion Daily Small Cap Bull 3X Shares ETF , which seeks returns of 300 percent of the daily performance of the Russell 2000, and the Direxion Daily Small Cap Bear 3X Shares ETF , which is trice-short the Russell, tapping into market volatility.

On Tuesday afternoon, markets swung madly as investors parsed comments from the U.S. Federal Reserve pledging two more years of near-zero interest rates. Indexes reversed course six times before ending more than 4 percent higher.

After the market dipped, I sensed there would be a move to the upside so I went long, Donohue said. In Wednesday's similarly volatile session, I was long in the morning then went to TZA late in the day.

BELLE OF THE BALL

Donohue isn't the only trader embracing favorite names to avoid the fluctuations of the broader market.

Right now the belle of the ball is the FactorShares 2X: Gold Bull/S&P500 Bear ETF , said Joshua Brown, vice president of investments at Fusion Analytics in New York, referring to a fund that is double-short S&P futures and double-long gold prices.

Volume on the fund has surged in recent sessions, with the 10-day moving average more than triple the 50-day average.

It was built for this moment, Brown said of the fund, which is up 76 percent from its July 1 recent closing low. The chart looks like the Empire State Building.

Of course, the velocity of the changes in market direction means traders who are not nimble can get caught on the wrong side of a trade, exposing themselves to massive losses.

The FactorShares fund is a momentum heavy story, Brown said. if you're not quick on it, it's the kind of instrument that can wipe you out.

With sudden moves between gains and losses an ever-present concern, traders do what they can to find an edge.

SEIZE THE MOMENT

Chicago-based Bright Trading trains its traders to manipulate mechanics like the opening gap, where they take advantage of price gaps in the initial trading of the stock.

The other day General Electric Co opened and moved up 40 cents within 60 seconds, said Donald Bright, one of the firm's directors.

Traders made thousands of dollars on it right then, and when you see openings where the market moves 300 points, the returns are even bigger... Lately we've had the best days on (opening gap plays) that we've had in maybe a year.

Toward the close, the firm looks to take advantage of order imbalances, which are published 15 minutes before the market session ends and suggest which side of a trade will have greater demand.

Knowing the imbalance gives an edge that works a lot of the time, Bright said. Experienced traders at our firm dream of days like this, he added. They make more in a week than they do in a month, normally.

But the recent price action can be too much of a good thing, even for traders who thrive on fast swings.

I love volatility, But I don't think we wanted to get to this level of volatility every day, said Tony Battista, who co-anchors Chicago-based Tasty Trade's how-to show on trading techniques and was a market maker for 25 years.

You don't like for the market to have this type of percentage move in a day, he added. That's something nobody wants to see, even volatility buyers.

Battista's solution to trading losses was simple -- do something to change his luck. I changed my pen this morning, he joked. I had a $2 pen. I went to a 15-cent pen. It's back to basics now.

(Editing by Janet Guttsman and Dan Grebler)