Futures Swing traders opinions please.....?

[Stymie]

That's what I did when I semi retired, cut account by 75% and quit using stops because I now only need consistent profits better than investing but not large profits like if I owned a business. There is no problem with trading. I won't say it's easy but quite doable if you stick with it. The problem arises when you need large monthly profits on an account that is so large that if you lost it all it would be a tragedy.

When you dollar average down, the subsequent move back can be a significant profit maker. Obviously, your position is no longer small. The portfolio risk is higher. But the terminal loss at zero is significantly less from the original trade. Then there is the assumption that the underlying business has a residual Value and that zero is highly unlikely but still possible.
That is where I've made the bulk of my profits over the last 30 years. My first trade was always the worst one. Total portfolio risk was approximately 10% at zero.

 

[Spectre2007]

The biggest danger of swing trading futures is the possibility of some overnight news event that send prices into a tailspin. On the flip side, this is good if you're on the right side of the trade. I.E: The Swiss Franc debacle a couple of years ago.

As for protection...besides a stop loss, the only other protective measure I can think of is that of getting in near the danger point and trading at a comfortable position size.

I don't have a favorite contract to trade. I trade whatever I think is in a position to move. I don't even have to know the name of the market. Thankfully, Thinkorswim has a feature that allows you to calculate the exact amount of potential profit and loss of any trade before hand.

for protection, could use options, and create a synthetic put or call..for protection against gaps from day to day. Gaps can destroy a viable system.

 

[java]

When you dollar average down, the subsequent move back can be a significant profit maker. Obviously, your position is no longer small. The portfolio risk is higher. But the terminal loss at zero is significantly less from the original trade. Then there is the assumption that the underlying business has a residual Value and that zero is highly unlikely but still possible.
That is where I've made the bulk of my profits over the last 30 years. My first trade was always the worst one. Total portfolio risk was approximately 10% at zero.

That about sums it up. Only everything I have on is usually spread to some degree. But like I said, unless you are 1:1 you are naked just like everybody else. Bet on the chop or bet on the trend. Big money is made on the trend, but spending money is made on the chop. Buy low sell high. How do I know it's low? It's lower than it was. Put it on and hope the market chops like it usually does. If it trends 50/50 you are either on the right side or the wrong side. Either way best course of action is to do nothing. That's why I don't like stops (or running out of money), they both force you to do something at the worse possible time.

 

[Money Trust]

for protection, could use options, and create a synthetic put or call..for protection against gaps from day to day. Gaps can destroy a viable system.

I don't know a whole lot about options but based on what and others have stated in this thread, it may be worth looking into options for risk management purposes.

 

[rajesheck]

Overnight gaps created due to news & events are the biggest danger to swing trading.

Another danger is swing traders tend to depend on news & events and FA instead of TA.

Yet another danger is that there are lot of inefficient methods in TA, for example price action patterns.

Simple trend trading technique is the best practice. But the problem is we don't get enough quality signals on EOD chart.

Part time traders prefer swing trading for convenience. With scarcity of quality signals in swing trading, traders tend to force themselves to participate in weak signals.

Lot of patience is needed to wait and trade on quality signals. There is good potential of profits in swing trading. Yet stoploss is the final hurdle in this game, because a small overnight gap can hit the stoploss.

IMO swing trading needs a bit of luck even for a seasoned trader.

For the rest of the world swing trading is just a gambling.

 

[murray t turtle]

The biggest danger of swing trading futures is the possibility of some overnight news event that send prices into a tailspin.
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How about the risk of not capitalizing on the many overnight gaps in your favor you will miss. Price movement with good momentum most often moves in the same direction after hours which far outweighs the gaps that go against you.

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Good points/good moves; even with average momentum.Trade , so as to even if you had a 50% Draw Down it would not kill you.[NOT saying 50%DD should be a goal,LOL]Good momentum can be helpful if one likes to get out of a trend trade real early--takes all kinds to a make a market.

 

[achilles28]

The biggest danger of swing trading futures is the possibility of some overnight news event that send prices into a tailspin.
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How about the risk of not capitalizing on the many overnight gaps in your favor you will miss. Price movement with good momentum most often moves in the same direction after hours which far outweighs the gaps that go against you.

Exactly. Took me 12 years to realize it. What's the greater risk. Missing out on huge moves each and every time. Or occasionally getting slipped on a stoploss in the overnight market. Just put the stop to breakeven plus 10-20 ticks if a trader is worried about slippage outside regular trading hours

 

[java]

Gotta be able to handle several consecutive limit move days against you. Stops won't help you there and you don't want to be waiting in line to get out on the first break.

 

[Overnight]

Hmm. Could someone show an "overnight gap" in a future during a trading day? Someone here a few months ago explained it for stocks I think, but without a visual representation I cannot get it.

 

[java]

Hmm. Could someone show an "overnight gap" in a future during a trading day? Someone here a few months ago explained it for stocks I think, but without a visual representation I cannot get it.

It's just one small candle, no trading, opens up or down the limit and that's it for the day.