From Swing Trading to Day Trading

M

Money Trust

As I've stated in many threads before, I'm currently a swing trader and have been for some time mainly due to the fact that I work full-time and day trading simply wasn't an option. Now, I'm working less on my job and I'm thinking about doing some day trading when the markets are quiet on the swing trading end of things.

My current system is strictly technical and works with a high degree of accuracy. I guess my dilemma would be to modify that system to fit the intraday time frame.

This may sound silly but I wanna hear opinions of some who've actually made the transition. What was your experience in going into intraday trading and how much different was it than holding for longer periods of time?
 
For me it wasn't a good experience and I have to admit I lost some and I returned to swing and position trading. My bad performance was primarily due to overtrading with confidence. But more important than that is the fact that robot algo population has increased a lot in past years and smooth intraday trends are hard to get. I want to try again but I would not like to go back and start chasing small intraday gains only to see one bad trade that goes through a stop erasing many winning ones.

I follow several quant blogs and I have noticed that there is a trend developing for a return to intraday trading due to the low swing trading volatility but also due to overnight gaps that pose portfolio risks. See a recent example in this blog. One possibility I'm looking at is the "entry on open/exit on close" strategy for liquid stocks and I will trade 4 each time long/short with portfolio allocation based on beta only.
 
I went from long term stock trading to day trading, it was NOT a happy transition, handful of losing years. Looking back saw stock trading to be very easy, in my eyes I saw setups that looked logical and took long and shorts. Anything that looks logical day trading usually means where the retail trader going to get screwed now. I had to change my whole way of thinking and little by little became a scalper, so I now I have become the guy who watching it drop or scream on up, and as per my trading plan, go the other way.

Only in last couple years have added swing trading but it more of adding on to existing long term positions, have really gotten into options in a big way, so many ways to screw other traders it is unreal. I am real sure this will be next area the "Big Boys" will be flooding into for a few years and then gov't will step into that after all have made boatloads as they did with HFTs. But I have always thought when government gets involved, it mucks up markets and never helps them. Ones who complain the loudest are the ones who can't trade, either learn to adapt or get out.
 
If you trade basic price action, it doesn't matter much because the concepts (trend, strong trend, range, consolidation, etc.) translate from swing to intraday and vice versa. What makes intraday so tricky is that you have to be able to trade all valid setups during your chosen time window and you have to think on your feet, often preparing to reverse positions in certain circumstances.

The attached chart of oil futures shows the swing trader's daily chart (well-defined uptrend) and the day trader's 5-min chart (during a well-defined uptrend). It's hard to tell the difference IMHO.
 
Good post and graphic.

NoDoji said:
If you trade basic price action, it doesn't matter much because the concepts (trend, strong trend, range, consolidation, etc.) translate from swing to intraday and vice versa. What makes intraday so tricky is that you have to be able to trade all valid setups during your chosen time window and you have to think on your feet, often preparing to reverse positions in certain circumstances.

The attached chart of oil futures shows the swing trader's daily chart (well-defined uptrend) and the day trader's 5-min chart (during a well-defined uptrend). It's hard to tell the difference IMHO.
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