From day trading to swing trading
- Thread starter JPB
- Start date
Well, I'm not qualified to give advice, but in my opinion:
1. Stay away from instruments that take big plunges up and down: NO PHARMA, beware cutting-edge tech. One move against you, and you're deep in the red for months with dead money, or you have to dump and take the loss. Also avoid smaller companies; say, less than 1B in market cap. These companies either get bought out, or crushed when a big player starts giving away what they have for free. It can be great news, or not--depending if you're long or short. Regardless, you're after the swing--not a big hit.
2. Stick with instruments that:
a. Have market cap of 1B or more. Download the company list spreadsheets from the Nasdaq at the link below, and you can sort
http://www.nasdaq.com/screening/company-list.aspx
b. Those that have a well-defined market share
c. Have a steady revenue stream that's based on a clear and reliable demand.
c. Instruments that swing up and down throughout the week, but don't stray too far from their average price.
d. Utilities were pretty good for this. I just poked around a bit, and found the New York Water Company (Nasdaq:YORW). Pretty boring, and with speculation anything can happen, but it has a reasonably predictable swing. No question about it: people need water.
1. Stay away from instruments that take big plunges up and down: NO PHARMA, beware cutting-edge tech. One move against you, and you're deep in the red for months with dead money, or you have to dump and take the loss. Also avoid smaller companies; say, less than 1B in market cap. These companies either get bought out, or crushed when a big player starts giving away what they have for free. It can be great news, or not--depending if you're long or short. Regardless, you're after the swing--not a big hit.
2. Stick with instruments that:
a. Have market cap of 1B or more. Download the company list spreadsheets from the Nasdaq at the link below, and you can sort
http://www.nasdaq.com/screening/company-list.aspx
b. Those that have a well-defined market share
c. Have a steady revenue stream that's based on a clear and reliable demand.
c. Instruments that swing up and down throughout the week, but don't stray too far from their average price.
d. Utilities were pretty good for this. I just poked around a bit, and found the New York Water Company (Nasdaq:YORW). Pretty boring, and with speculation anything can happen, but it has a reasonably predictable swing. No question about it: people need water.
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As a swing trader overnight gaps happen. In a data set of 100+ trades the sum of all gaps should result in a considerable net gain since most gaps should work out in your favor if your in sync with the current price trend. Trading large cap stocks like those on the OEX-100 minimize large gap risk. Trading smaller position sizes especially on the smaller cap stocks makes those rare big gaps that go against you a non-event. Swing traders need to have good rule based risk/trade mgmt to deal with volatility - utility stocks are just to lethargic for me to waste capital & time with.
Better yet learn how to trade big gaps with big volume - these are the best signals out there period since all the players have shown there hand- they are warning of a likely parabolic move in the coming months that has likely just began and are often rather predictable (edge) as to how they play out.
Some swing traders make a good living trading only breakaway gaps.
Another option is to swing trade the round the clock markets- futures & Fx. You may still get caught in a gap on the Sunday opening although they are usually small and often close right away. Or better yet, trade them all - I sure do.
Better yet learn how to trade big gaps with big volume - these are the best signals out there period since all the players have shown there hand- they are warning of a likely parabolic move in the coming months that has likely just began and are often rather predictable (edge) as to how they play out.
Some swing traders make a good living trading only breakaway gaps.
Another option is to swing trade the round the clock markets- futures & Fx. You may still get caught in a gap on the Sunday opening although they are usually small and often close right away. Or better yet, trade them all - I sure do.
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Unless it's a biotech ETF (XBI or IBB). XBI was great for premium selling last year.
Except for those pesky 50% declines, e.g. from summer 2015 to early 2016.
What about when the "change" gets taken from you. LOL
Doesn't sound much different then my daily routine, except that I enter nearly all my positions within the first hour. My front end can customize to swing, or daytrades (although I don't swing). Those automated stop adjustments are crucial, regardless of R:R. After the close, I run autoscripts, that populate spreadsheets with test data. Life is good
That's why I said last year and not this year. XBI could be ready to move 10 points lower over the next month...not sure though, but it seems to have found some resistance around 72...market feels extended in general.
There's a lot of good advice here. After many years of mostly day trading, I leaned more toward swing trading in 2005. However, when I catch a good trend (akin to surfer finding a wave), I'll certainly day trade.
I perform weekly scans every Friday, and have the list of stocks (with preliminary entries and exits (est's), alerts and limits) in my weekly trading plan. Every month (minimum), I fine-tune my long-term trading plan (a real business plan) and update my "trading stable". I tend to stay with stocks that are in my stable, and rarely trade outside of it, that allows me to avoid "some" intraday surprises. If needed I make adjustments to my weekly trading plan on Sunday.
Have a solid and long term trading plan and trading stable in place, it will keep you in a better place (change favors the prepared mind). Anything less, and you may find yourself trading by the "seat of your pants".
Good luck...
Thanks for all the responses. Ramoutar, your path from day to swing is what I had in mind to wade back in. I've spent a good part of this morning looking at my old posts from 15 years ago on here. Seems like a different person. In my previous life I went from trying to look at everything, to a basket, to eventually just the S&P minis over the course of a year or so. I just felt if I could focus on one or two with consistent fills I could manage it better. Swing trading I expect to need to look at a basket or base on scans. I still plan to use time frames that are useful for technical trading vs. company analytics (investing). I hadn't thought of just trading the first 1/2 hour, which was my best time, if I had one previously.
Thanks again.
Thanks again.