I disagree, the real difference is you SL and expected profit size.
Not that swing trading is anything like jumping on a news spike for a quick 20pts.
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Is Day Trading Inferior to Swing Trading?
- Thread starter jonny1lot
- Start date
I disagree, the real difference is you SL and expected profit size.
Not that swing trading is anything like jumping on a news spike for a quick 20pts.
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I have seen a trader who could not make consistent profits (make more loss) during London and New York session on FX market but he has been able to do better during New York closing to Asian session during which the volatility is relatively lower.
For me, I do the opposite. I am a small trader so I need to trade during a high volatility period whereas he trades relatively big money so sometimes his loss was as big as $3,000 or even bigger a day...and maybe that's why he chooses less volatile time.
A lot of traders' common problem that I see is that they don't know each market's characteristics and they just throw out money as if they were playing a game.
It's also a common problem that you can see at casino. All of sudden, the heavy $50 note becomes like a toy.
I have stopped trading Yen cos of its lack of volatility.
I rarely trade EURO cos its volatility is relatively smaller than Pound.
I have stopped trading exotic currencies like rand and Krone cos its spread is too large and expose me to too much risk of losing my money, and even if I know where I need to hook my stop loss, still that amount is too large for me to carry.
So I only trade GBP pairs - high volatility, perfectly suit to price action traders cos of consistent patterns it generates.
You have to come up with rational reasons why you don't want to abandon a certain strategy or market otherwise fear will prevent you from becoming better trader.
I guess fear is the biggest obstacle that prevents a trader making progress.
I am a day trader and also price action trader. Most of time I close each day with profits.
Don't rely on technical tools too much either, they often give too slow signal especially during high volatile periods.
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Hedging..., risk/ position re-balancing..., stop / liquidity hunting..., HFT - are but a few types of trading which have absolutely nothing to do with "swing trading"
Quite a few more don't either
RN
Is Day Trading Inferior to Swing Trading?"
There is no Inferior or Superior way of trading in the market.
You just have to be aware of the certain skill sets that each trading instrument and style generally require. -- otherwise you're just a walking blind fool with no cane
One person could be really successful at a certain way of trading -- and tout it as the Greatest thing, ever! Maybe for him it is...but to expect everyone to follow and realize that success is completely unreasonable.
What I'm saying is there are different strokes, for different folks. One size does not fit all.
There is no Inferior or Superior way of trading in the market.
You just have to be aware of the certain skill sets that each trading instrument and style generally require. -- otherwise you're just a walking blind fool with no cane
One person could be really successful at a certain way of trading -- and tout it as the Greatest thing, ever! Maybe for him it is...but to expect everyone to follow and realize that success is completely unreasonable.
What I'm saying is there are different strokes, for different folks. One size does not fit all.
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There's basically been maybe 1-2 people in this whole thread who have even broached the cost of time. If you can make the same or slightly less returns swing trading with less TIME spent doing it, then I'd say it's superior.
If you're a market junky and you need action, then you're not really approaching it from the above aspect anyway. Let's be real, most people tie "day trading" in with 1999 style type stuff and those days are long gone, the markets are quite different now and IMO people sure are spending a lot of TIME trying to eek out returns on an intraday basis that they could probably be doing on a multi-day basis with less actual BS, fakeouts, overhead costs, etc etc.
If you're a market junky and you need action, then you're not really approaching it from the above aspect anyway. Let's be real, most people tie "day trading" in with 1999 style type stuff and those days are long gone, the markets are quite different now and IMO people sure are spending a lot of TIME trying to eek out returns on an intraday basis that they could probably be doing on a multi-day basis with less actual BS, fakeouts, overhead costs, etc etc.
Ok, I should have worded it differently. Intraday trading is swing trading on a smaller time frame.
If you have or want to trade with leverage, day trading is really the only way to go. Swing trading can provide higher % wins, but the overnight risk can wipe you out if leveraged. Just check the some of the posts from last August when the market opened way down. Some of the unfortunate lost everything and more.
If I may chime in.
I think there is no concrete answer because it really depends but I would argue that day trsding is most def not inferior in any way for the reasons ill list below:
1. Tail risk. I really believe that there is way more of this black swan risk when taking on multiday positions. This also includes earnings and general unexpected news like linkedin getting bought out. When you daytrade your exposure is limited to really maybe a few hours a day. With a swing trade you are exposed to completely unexpected news. A day trader is generally there watching his position like a hawk so if a news announcemnt is released unexpectedly he is able to get out quicker than the swing trader who may not even be aware of it until much later or as usual gets caught on an overnight announcement and hes screwed the next day when it gaps higher.
2. I dont buy the argument that you can do your day job while your swing trades work for you. This is like saying swing trading only takes an hour a day but really does it because I used to do itand it tool.me hours each day to research new positions and all the work required in generating an edge. This should compared as if the traders are both professionals who spend all day doing this. That is an apples to apples comparisons. Also u can throw in the argument that a day trader trading the US market from london can also keep day job while trading st night.
3. Most of the time markets dont make meaningful moves up or down. The day traders use this to their advantage and can generate fat intraday prodits when the markets havent budged. My best days are generaly where the market doesnt travel far up or down, I can say this to be true for many other people ive worked with as well. Swing traders generally need their product to break out or make some kind of large move over a period of days, not so with day traders.
4. I also dont buy the argument that day traders will get the slow bleed of death by commissions/ over trading. While thats true for people that are new to the game, if you have a real edge it doesnt matter if you are day trading or swing trading. An edge means positive expectancy so the more you trade the more profits generally. So a day trader is not really at any disadvantage if his edge is in the short term scalps or whatever.
5. For the novice trader I will say to stick to swing trading however. The commisions and the lack of experience will ensure a much quicker blowup in the intraday timeframe.
I think there is no concrete answer because it really depends but I would argue that day trsding is most def not inferior in any way for the reasons ill list below:
1. Tail risk. I really believe that there is way more of this black swan risk when taking on multiday positions. This also includes earnings and general unexpected news like linkedin getting bought out. When you daytrade your exposure is limited to really maybe a few hours a day. With a swing trade you are exposed to completely unexpected news. A day trader is generally there watching his position like a hawk so if a news announcemnt is released unexpectedly he is able to get out quicker than the swing trader who may not even be aware of it until much later or as usual gets caught on an overnight announcement and hes screwed the next day when it gaps higher.
2. I dont buy the argument that you can do your day job while your swing trades work for you. This is like saying swing trading only takes an hour a day but really does it because I used to do itand it tool.me hours each day to research new positions and all the work required in generating an edge. This should compared as if the traders are both professionals who spend all day doing this. That is an apples to apples comparisons. Also u can throw in the argument that a day trader trading the US market from london can also keep day job while trading st night.
3. Most of the time markets dont make meaningful moves up or down. The day traders use this to their advantage and can generate fat intraday prodits when the markets havent budged. My best days are generaly where the market doesnt travel far up or down, I can say this to be true for many other people ive worked with as well. Swing traders generally need their product to break out or make some kind of large move over a period of days, not so with day traders.
4. I also dont buy the argument that day traders will get the slow bleed of death by commissions/ over trading. While thats true for people that are new to the game, if you have a real edge it doesnt matter if you are day trading or swing trading. An edge means positive expectancy so the more you trade the more profits generally. So a day trader is not really at any disadvantage if his edge is in the short term scalps or whatever.
5. For the novice trader I will say to stick to swing trading however. The commisions and the lack of experience will ensure a much quicker blowup in the intraday timeframe.