Is Day Trading Inferior to Swing Trading?

[jonny1lot]

Simply looking at the speed of swing trading versus day trading (day trading encompasses multiple round turns a day which greatly increases costs and reduces risk adjusted returns) and the ability to return $3-5 for every dollar risked (versus day trading where $1-2 for every dollar dollar is more reasonable), I just don't understand how the business of day trading makes sense.

Are there any arguments for day trading? I'm considering abandoning it all together as my results are night and day swing trading vs. day trading.

 

[Laissez Faire]

Are there any arguments for day trading?

Huge profit potential.

I'm considering abandoning it all together as my results are night and day swing trading vs. day trading.

Sounds like a good idea if you're not successfull day trading, but successful swing trading.

 

[jonny1lot]

Huge profit potential.

I don't think this is true on a risk adjusted basis.

 

[qxr1011]

I don't think this is true on a risk adjusted basis.

risk (if identified correctly) adjusted basis is equal throughout the markets and time frames

if it would be (or appears to be ) otherwise people would immediately move money from one market to another (or one time frame to another) and they actually do that when it appears the case

funny thing is that for those who have a working method and for those who does not have it - it does not change outcome really

 

[BONECRUSHER]

I don't think this is true on a risk adjusted basis.

For me, day trading is least risky...I have way more control over risk and profit. I don't want any surprises with news...I trade my plan with a degree of certainty I'm comfortable with. Swing trading drives me nuts...always unexpected news to deal with...can't stand the GAPS either!

 

[Handle123]

Simply looking at the speed of swing trading versus day trading (day trading encompasses multiple round turns a day which greatly increases costs and reduces risk adjusted returns) and the ability to return $3-5 for every dollar risked (versus day trading where $1-2 for every dollar dollar is more reasonable), I just don't understand how the business of day trading makes sense.

Are there any arguments for day trading? I'm considering abandoning it all together as my results are night and day swing trading vs. day trading.

Very very few day traders make good profits AND been doing it more than ten years on making the huge swing trades and staying in hours instead of most staying in minutes. From my own stats, Index trading is the worst of all Futures instruments for longer trend Day trades. Financials, Currencies, Coffee, Bund offer better longer term than Indexes. But the Indexes especially ES have the volume to get in/out with less slippage. Being a scalper my risk to reward is opposite of those who go for longer profitable moves, and I think Swing traders risk much less than a day trader when you consider how much total a day trader will risk in entire day. If you risk $100 and do 10 trades, many give their right arm to net $200 on day, so you might think he is risking $100 to make $200, and it sounds nice, but in reality they risked $1000 to make $200 AND on top of that, most are retail and paying $4 bucks a roundturn.

Plus, what most don't realize is loss of income by day trading unless you working nights as I did for 17 years. So if you make $10 an hour, you losing $400 a week and perhaps you losing health bennies, vacation/sick pay etc, you have to take this under consideration. Whereas Swing trader can still keep day job even when he might be making more in trading, day job can be considered a hedge.

But so many think they are "special" and can beat the market, but they forget about the Sharks and automation, traders who been doing it years and just waiting for new Meat. I know many newbies are looking at my post and just laugh as they just opened their account and scanned some charts for a week and think hell this is easy, but once you in the thick of what to do after you are in=BAIT.

 

[qxr1011]

Plus, what most don't realize is loss of income by day trading unless you working nights as I did for 17 years. So if you make $10 an hour, you losing $400 a week and perhaps you losing health bennies, vacation/sick pay etc, you have to take this under consideration. Whereas Swing trader can still keep day job even when he might be making more in trading, day job can be considered a hedge.

the correct description above imho missing one important point : you explaining the risk of people who do not know what they are doing, you talking not about traders but about wannabe traders....

yes they should consider everything what you explained

but again its not related to the OP question

 

[J_Smith]

Simply looking at the speed of swing trading versus day trading (day trading encompasses multiple round turns a day which greatly increases costs and reduces risk adjusted returns) and the ability to return $3-5 for every dollar risked (versus day trading where $1-2 for every dollar dollar is more reasonable), I just don't understand how the business of day trading makes sense.

Are there any arguments for day trading? I'm considering abandoning it all together as my results are night and day swing trading vs. day trading.

It all depends on whether you know what you are doing, or not!

Garbage in = Garbage out!

Both can be very profitable, and very costly - it is entirely up to the individual, how clever he is, or how stupid he is!

J_S

 

[jonny1lot]

I'm not saying that day trading isn't profitable, it can be very profitable. But when you look at the risk you have to assume, it's higher than a lot people think. And on a risk adjusted basis, I wouldn't be surprised if most profitable day traders only ended up with a SR of 1-1.5, which is roughly what you achieve swing trading, on a risk adjusted basis.

So my point is, at best, a profitable discretionary day trader would most likely have a similar SR to that same trader swing trading. The only difference is that every RT costs you SR points. So why would you take 20-30 RTs in a week and all the costs associated with it when you can take 2-3 RTs and make the same on a risk adjusted basis?

 

[J_Smith]

I'm not saying that day trading isn't profitable, it can be very profitable. But when you look at the risk you have to assume, it's higher than a lot people think. And on a risk adjusted basis, I wouldn't be surprised if most profitable day traders only ended up with a SR of 1-1.5.

Risk is related to exposure - it is all relevant!

J_S