How do you not get caught by downdrafts?

B

bstay

Hi,

I've been learning to daytrade/swingtrade for some years, and recently turned fulltime. But everytime I'm loaded with "good" swing positions, I got washed out by market downturns such as the one yesterday.

Reminds me of year 2000 when I lost a bunch and stopped trading to concentrate on job. How do you protect your swing profits? Anyone else in my situation?

Thanks.
 
By definition, a swing trader buys the downdrafts and sells the upturns -- you should be out selling on strength with no patience for sitting through pullbacks.

As for trailing stops, I find them specifically useful only during extreme price moves -- parabolic, blow-off volume situations. They are basically an admission that you are ready to exit the position; for me, I usually find I do better just exiting at market whenever I find myself thinking about trailing up my stops, but that's just me.
 
Quote from illiquid:

By definition, a swing trader buys the downdrafts and sells the upturns -- you should be out selling on strength with no patience for sitting through pullbacks.

As for trailing stops, I find them specifically useful only during extreme price moves -- parabolic, blow-off volume situations. They are basically an admission that you are ready to exit the position; for me, I usually find I do better just exiting at market whenever I find myself thinking about trailing up my stops, but that's just me.
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Yeah, makes sense. I was actually leaning towards a mental trailing stop. Just know where you'd like to get out to protect gains.

That is how I do it, but good advice, as that is how I do it, but sometimes get a stock that goes heavily in my favor and will mentally trail the stock, i see nothing wrong with that... as long as it is a liquid stock that is, if not, then.... I can't help you.

EDIT: I'm not a swing-trader though, so... my suggestions shouldn't be taken as seriously as a swing-trader.
 
Thanks for the suggestions, I guess I should stay out today. Trailing stop is a good reminder that I should lower my profit target/expectation during this period.
 
Quote from stay:

Hi,

I've been learning to daytrade/swingtrade for some years, and recently turned fulltime. But everytime I'm loaded with "good" swing positions, I got washed out by market downturns such as the one yesterday.

Reminds me of year 2000 when I lost a bunch and stopped trading to concentrate on job. How do you protect your swing profits? Anyone else in my situation?

Thanks.
More...

I think you should ask yourself a couple of key questions before you begin full time trading again.

Are you willing to adapt to an ever changing market?
Obviously it was not a "GOOD" swing position because you lost money. How are you objectively judging your trades?
You say you have been swing/day trading for years and just started trading full time. Do you have a trading plan?

If you are trading full time have you thought about trading more actively during the day?

For my trading style I need to have over 50% winners to be profitable. To accomplish this on a daily basis I make between 20-50 trades a day. The more attempts the market allows me to have the better chance I have of batting for average.
 
Quote from bstay:

Hi,

I've been learning to daytrade/swingtrade for some years, and recently turned fulltime. But everytime I'm loaded with "good" swing positions, I got washed out by market downturns such as the one yesterday.

Reminds me of year 2000 when I lost a bunch and stopped trading to concentrate on job. How do you protect your swing profits? Anyone else in my situation?

Thanks.
More...
==============

Bstay;

Prefer to Day trade and
swingtrade separate acounts. Dont merge the 2 ;
or at least till you get it.

SPY, ES, DIA,YM had a fairly typical sell /correction in buy/ uptrend;
sounds like you were daytrading, without written plan.
50 period moving average helps with plan.

On mountain charts, daytrading
AND swingtrading;
like to buy after the valley, sell after some peaks,
premature selling , dont usually care much for it.

Sounds like mainly you need a well researched plan;
the plans of the diligent.-Solomon, trader king
 
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