Day/SWING/POSITION ?? TRADING

[gmst]

Quote from jokepie:

Agreed !! Thats the goal of this blog is to prove at least theoretically (if not Practically) that there is No difference in Day/SWING/Position trading(strategies). Its only "experience that makes the difference. Stress/ Pressure are by- products of lack of experience when your brain is working exponentially hard to predict future without enuf Data of its OWN. Juast like driving a car. A new learner always twist their neck around looking into mirrors, klooking at the stick while making a shift, jerks the cluch and slowly these movements smooth out and become subconcious functions.

Agree with most of what people have said in this thread, with one important difference - as Handle123 pointed out.

Carefully chosen swing trades (duration from 2days-2 months or even longer), offer 5:1, or even 10:1 or rarely even 20:1 reward:risk in trader's favor. The trick is to catch a big trend at a good level. As a day trader, who closes position at the end of day, it is impossible to catch the full trend, even if everyday you play in the direction of trend, because of ensuing gaps that a good trend invariably produces. And because typically a day trader is highly levered, every now and then he will be taking losses on his position even when that position is in the direction of trend.

There is another side to this story though - if as a day trader, a person has a great methodology and can manage drawdowns relatively strictly then his compounding ability is FAR MORE than that of a swing trader.

 

[jokepie]

Quote from gmst:

Agree with most of what people have said in this thread, with one important difference - as Handle123 pointed out.

Carefully chosen swing trades (duration from 2days-2 months or even longer), offer 5:1, or even 10:1 or rarely even 20:1 reward:risk in trader's favor. The trick is to catch a big trend at a good level. As a day trader, who closes position at the end of day, it is impossible to catch the full trend, even if everyday you play in the direction of trend, because of ensuing gaps that a good trend invariably produces. And because typically a day trader is highly levered, every now and then he will be taking losses on his position even when that position is in the direction of trend.

There is another side to this story though - if as a day trader, a person has a great methodology and can manage drawdowns relatively strictly then his compounding ability is FAR MORE than that of a swing trader.

Thanks GMST,

I am deligently researching and trying to break the myths of trading. I am currently working on a concept - creating a opportunity. this (if i can successfully jot down) has potential to replace all patterns or trading methedologies with one - Which is making money when the market moves.
Keep an eye on the thread http://www.elitetrader.com/vb/showthread.php?s=&threadid=232746&perpage=6&pagenumber=1
I will ask for interested individuals to PM me - I will not post it on a open thread.

GL and keep an eye on vix

 

[murray t turtle]

Quote from jokepie:/Murray TT on Rich Dennis noting ''there is an insurance premium on overnight holds/trends...''

This is the very reason, Day trades are less risky and OBviously low return trades.
The difference comes in the Probability of successfull trade and that totally dpends on a traders ability to spot a trend, then execute while maintaining risk levels comfortable.

The fact of the matter is that One needs to SIMULATe a long term trade in Intraday chart. How can this be done ??? Very simple - Be selective in choosing the charts. With experience one can just spot trendy ones in a glimpse. There are tons od stocks that do that every day. They are just not the same ones every-day.
On this basis...day trading Futures is tuff (folks obviously stick with one -favourite future)...as they ususally do not trend nicely all the time - one has to be very selective intraday or trade a higher time frame if possible

===========
JP;
its murray T.

I agree with much of that;
not that i ignore how insurance companys make money.

In other words how insurance companys make money can be a big help, over time...........................

 

[ssrrkk]

Quote from jokepie:

Hi all,

I wanted to start this thread to discuss something that has been brewing in my head for quite some while. I feel this might be a good contribution to someone who is starting ot is struglling.
I have started to believe that there is NO difference is trade-ability (excuse my english) or level of difficulty between Day/Swing/Position !! The reason I believe this is that there is no way to tell which time frame a CHART is if you remove the information on its axis. For an example a 5 minute candle chart of any instrument with lets say 200 candles can be a daily or weekly/chart of 200 candles as well. It might very well could be a tick chart!!!
So, if we remove the axis information, indicators & news only ABILITY that then matter is traders reaction TIME. Every NEW candle requires the trader to make adjustments to their conviction and make trading decision and the PAST candles are STATIC INFORMATION.

Then what does it all come down to ? - EXPERIENCE !!!! which drives your response time.

So, don't we all need to CALM the Fak down and take things slow. START BACK wards from position to swing to DAY. Highest possible time frame towards the minute charts. small size to big size and just keep gaining screen time and experience. Everything else will be FINE>

In my years of experience, i hav seen big losses, emotion swings that left me trembling in my chair. I never gave up the quest and kept telling myself that I will achieve excellence and beieved success will be inevitable.

The reason this thread is in psychology section is that BIGGEST factor in becoming a good trader is Psychology.

I hope to contribute to traders and trading community. I believe in Teaching is the best way to learn. So, please do not Judge me what motives I have and take it as you read it. I have other topics that I will bring for discussion here that might help us all. I want to see if we can get a constructive discussion going on this topic.

I hope other experience folks will contribute on this Idea.

Two more things that may or may not have been touched in this thread. First is the fact that if you are back testing, then day trading will give you a lot more statistics and perhaps a little more confidence in your back tests than swing trading because of the large number of trades. Likewise, because of the large number of trades, you can expect your performance to converge to your expected returns quicker, while your PL will be noisier (larger swings) for the poorly sampled swing trades and it will take much longer to converge to your mean profitability (e.g., months to years). Second, in day trading, you can do well without looking at news and earnings. The information will be reflected in the charts that you are staring at and the price swings have little relation to fundamentals. In swing trading, you better be paying attention or you could get caught with nasty gaps, and in the long run, earnings and news will influence the overall direction of the price.

As others have noted, there is a large "live-performance" aspect to day-trading that is less of an issue with swing trading. That's why many people like to automate their day-trading so that there are no issues with the execution of the strategies.

 

[jokepie]

Quote from ssrrkk:

Two more things that may or may not have been touched in this thread. First is the fact that if you are back testing, then day trading will give you a lot more statistics and perhaps a little more confidence in your back tests than swing trading because of the large number of trades. Likewise, because of the large number of trades, you can expect your performance to converge to your expected returns quicker, while your PL will be noisier (larger swings) for the poorly sampled swing trades and it will take much longer to converge to your mean profitability (e.g., months to years). Second, in day trading, you can do well without looking at news and earnings. The information will be reflected in the charts that you are staring at and the price swings have little relation to fundamentals. In swing trading, you better be paying attention or you could get caught with nasty gaps, and in the long run, earnings and news will influence the overall direction of the price.

As others have noted, there is a large "live-performance" aspect to day-trading that is less of an issue with swing trading. That's why many people like to automate their day-trading so that there are no issues with the execution of the strategies.

Thanks for adding value to the discussion ssrrkk !

 

[ElectricSavant]

The whole Psychology thingy changes when you have an edge...but what do I know?

ES

 

[ammo]

Quote from ElectricSavant:

The whole Psychology thingy changes when you have an edge...but what do I know?

ES

there is a downside to this as an edge gives you a bias and the trick is not to let the bias get between your eyes and the screen

 

[ElectricSavant]

automate it...

I will say this...Greed never dissapates.

Electric

Quote from ammo:

there is a downside to this as an edge gives you a bias and the trick is not to let the bias get between your eyes and the screen