Combining Day Trading with Swing Trading

[bone]

This is a great thread topic.

It's easier for a fund; you have an intraday trader or desk, and you have a longer term trader or desk - and so on. For example, the intraday desk might run machine alogorithms, and the longer term desk uses discretion.

My own personal experience, and my experience with hundreds of traders and clients is very similar to the difficulties previously stated by other posters - it would be exceedingly demanding for one person to simultaneously trade short term and long term well. Quite honestly, about the best I've personally seen a trader do is be a very good intraday trader and doing well with his 401K allocations. I know that many good traders tend to do well with and are quite active with their 401K retirement plans. You could also swing trade markets and be active with your 401K.

The focus requirements are so disparate between intraday and long term trading. For an individual to do both at a high level sustained over a long period of time is IMO too complex for most mortal individuals.

It would be better to do one thing well - be it day trading, or swing trading, or longer term trading; than to trade two multiple styles with mediocre results.

Just my own 2 cents, YMMV.

 

[murray t turtle]

Here's another question related to this. So I'm holding a swing trading position. It has been consolidating to upward but has not truly breakout of this new range yet. It broke out of the prior range then rallies like 10pts above that then it dips back to the top part of the prior range.

Kind of frustrating. I don't want to exit the swing trading position yet since it has only been 2 weeks. And it has not fallen back to the old range. The lowest it has gone is the high of the prior range.

In this situation, I feel like I should daytrade around my core position to not get frustrated.

How do you guys handle this?

How much time do you allow a consolidating range to play out?

%%
Two[2]weeks is a small amount of time;
but profit is much more important, than any of your time desires .I use % more than Points. So just to use easy example , but not a prediction.Say it is strong stock seasonals,[time in months] like OCT-APR tends to be. SO uptrend is friend+ QQQ hits $120= uptrend is a friend;OOPS, QQQ dipped below $100, monthly candles,+ its APR,are they going to sell in May ?? Yes they did that[sell in may ,HEY]+ even if the bull move did last, 20%, or 30% is plenty of swing range for a good uptrend. SO no, i would not intentionaly let QQQ go back to 50% level, or top of past range, generally[1999-2000 bull + bear market QQQ example]. Good question.

 

[trader99]

This is a great thread topic.

It's easier for a fund; you have an intraday trader or desk, and you have a longer term trader or desk - and so on. For example, the intraday desk might run machine alogorithms, and the longer term desk uses discretion.

My own personal experience, and my experience with hundreds of traders and clients is very similar to the difficulties previously stated by other posters - it would be exceedingly demanding for one person to simultaneously trade short term and long term well. Quite honestly, about the best I've personally seen a trader do is be a very good intraday trader and doing well with his 401K allocations. I know that many good traders tend to do well with and are quite active with their 401K retirement plans. You could also swing trade markets and be active with your 401K.

The focus requirements are so disparate between intraday and long term trading. For an individual to do both at a high level sustained over a long period of time is IMO too complex for most mortal individuals.

It would be better to do one thing well - be it day trading, or swing trading, or longer term trading; than to trade two multiple styles with mediocre results.

Just my own 2 cents, YMMV.

Agreed. It's very difficult to do both well. According to my analytics, my swing trading is much more profitable than my daytrading.

Yet, I feel there's still an opportunity to use daytrading to smooth out the equity curve while I hold on my swing/position trades. Let's say I'm holding something long term. Nothing goes straight up. There will be pullbacks during the long uptrend. So I could short on an intraday basis while I hold something long-term. Or buy puts or short futures.

Vice versa if I short something long-term. There will be rallies. Buy those rallies on a short-term basis.

That's the theory. I have yet to do that. Just thinking and planning on how to do it well..

 

[trader99]

Lol. Yeah that has pretty good expectancy, but the theta decay is a bitch

i like your sense of humor.

 

[yc47ib]

Have traded long enough where whatever is doing long term in stocks and scalping/day trading Indexes is counter, I see it as double plus opportunity, movement of going counter, then going back with long term trend always size is larger.
Maintain multiple accounts, automation keeps track, long term is just that, stock positions were put on based of weekly charting and intraday doing 60 to 200 plus signals a 24 hour day, I manually trade new Index systems to see if worthy to get programmed and they kept in separate account.

If you have become experience enough to find short term extremes in stocks, you can hedge open profits using stock options or Indexes/options till retrace is over, then reverse your hedge for profit play, you end up making something on down and up move while stock in same position, that is if prices come back to original price.

I have been combining both for a few years. I only trade futures though.
I have two accounts, one account holds all the short positions, the other holds longs, they are swing trade positions.
When I want to day trade, if I want to do longs, I use the account holding the longs, and churn them, and if I want to day trade shorts, I will churn the account with short positions.

I emphasize, not both accounts all the time have positions, the weight is not the same either, depending on my mid term market bias, and sometimes I am wrong. In October, I was not wrong in the general bias, but wrong in several measurement of the moves, that means I might close some swing positions prematurely. Also, since my bias was to long for the past few months, I was very reluctant to pile up the shorts, that ended with my shorts not making enough covering the loss in the longs.

For the rest of the year, I plan to adjust that, having more of the short bias in my day trading, unless it is a micro up trend. Good luck, it can be done.

 

[qlai]

I have two accounts, one account holds all the short positions, the other holds longs, they are swing trade positions.

I'm not following ... Why you need separate accounts?

 

[qlai]

Below is from "GEMS: Vulture" thread. Not trying to prove a point, just came across it in the hall of fame threads and it's beautifully put.

I also trade two separate time frames, although I feel that this is a difficult endeavour...For the most part, I try to separate the days in which I am going to enter a different mindset...If I am planning on entering a swing trade for a minimum profit target of 7-10 handles, I really need to be careful with the manner in which I start scalping...From my experience, swing trading and scalping require two entirely opposite mindsets and if you confuse the two it wreaks havoc on even the most well developed trading plans...

I will try to explain in more detail...To scalp, you basically have to partial out of trades extremely quickly and your reflexes have to be sharp...You do not have the luxury of time because a scalp is basically just trying to extract the minimal amount of profit with the minimal amount of risk exposure...To swing trade, you have to have patience, plain and simple...And not only that you have to increase your pain threshold since your profit/risk objectives are magnified...So, in essence, you are expanding your risk tolerance to allow yourself some wiggle room and to reduce or dampen the effect that the market noise will have on this aspect of the plan...The real problem occurs when your mind is somewhere in between...Like entering a swing trade with a minimum 7 or 10 pt profit objective and instantly finding yourself 3-4 handles ahead and covering...Or on the flipside, entering a scalp and finding yourself 3-4 pts in the hole and letting it run against you...

I say all of this because I honestly believe that I have never found any of the conventional techniques work for trading the indicies...The internet is littered with self described guru's who teach techniques that are basically only accomodating to one aspect of price action...They will post charts with beautiful flowing moving averages and little lines that show where you should have bought or sold...but the majority of it is hogwash...The truth of the matter is that so much of this stuff is adaptive and internalized...I respect some of Lundy;s posts because I feel that what he writes is much closer to the truth...The conviction is what wins in certain time frames...The quickness and agility is what wins in other time frames...Each time frame has a specific skill set that needs to be learned, but not compromised...When one time frame is compromised with the other that is when the errors mount...

So, essentially, what I am saying is that for me I have to know exactly which mindset I am going to be trading in for a specific period of time...When I break this rule I damage my plan...When I take profits too soon in my swing account, I leave big money on the table, money I will need to absorb the movement against when trading on a larger time frame...If and when I do not trade tight in the scalper time frame I am damaging my ability to come back from a series of what should be near scratch trades...

 

[trader99]

I'm daytrading less and less due to my work schedule. Even when I have the 1hour+ in the morning before work, I rather use that time to take care of other stuff I need to do.

Eventually I'll get back into the mood for daytrading again with edge. The time will come. Right now I'm still settling in to my new schedule.

 

[f8thtrader]

I've been trading for about 23 years, and overall I've got to admit that I have repeatedly succumbed to the attraction of trading both frames. I can mentally build a strong rationale for doing so. And with rigorous honesty, I can say that I HAVE allowed myself to hold onto a daytrade (or morning) loser and mentally move it into the "OK, I'll make that a swing trade because I still think it's a good trade". Discipline in trading is hard enough, but when I permit the easy excuse of switching to a swing trade, I think discipline becomes more than this mere mortal can manage.

 

[ironchef]

I've been trading for about 23 years, and overall I've got to admit that I have repeatedly succumbed to the attraction of trading both frames. I can mentally build a strong rationale for doing so. And with rigorous honesty, I can say that I HAVE allowed myself to hold onto a daytrade (or morning) loser and mentally move it into the "OK, I'll make that a swing trade because I still think it's a good trade". Discipline in trading is hard enough, but when I permit the easy excuse of switching to a swing trade, I think discipline becomes more than this mere mortal can manage.

You are not alone. Many of my failed swing trades became my "buy and hold" long term holdings.