A method is shown for selecting active, or hot, code traces in an executing program for storage in a code cache. A trace is a sequence of dynamic instructions characterized by a start address and a branch history which allows the trace to be dynamically disassembled. Each trace is terminated by execution of a trace terminating condition which is a backward taken branch, an indirect branch, or a branch whose execution causes the branch history for the trace to reach a predetermined limit. As each trace is generated by the executing program, it is loaded into a buffer for processing. When the buffer is full, a counter corresponding to the start address of each trace is incremented. When the count for a start address exceeds a threshold, then the start address is marked as being hot. Each hot trace is then checked to see if the next trace in the buffer shares the same start address, in which case the hot trace is cyclic. If the start address of the next trace is not the same as the hot trace, then the traces in the buffer are checked to see they form a larger cycle of execution. If the traces subsequent to the hot trace are not hot themselves and are followed by a trace having the same start address as the hot trace, then their branch histories are companded with the branch history of the hot trace to form a cyclic trace. The cyclic traces are then disassembled and the instructions executed in the trace are stored in a code cache.