Neo hr and swing trading

W

willsoph

Neo hr

I was reading a thread recently where you stated that you were having difficulty swing trading profitably.

As I have recently embarked on a swing trading business plan that I have developed over the last couple of months and as It would appear from your previous threads that I have attempted to educate myself from similar books to yourself, I would be grateful if you could elaborate on the difficulties that you have experienced and how you have overcome them.

Willsoph
 
Dear Willsoph,

I wanted to start like Candle "Oh my dearest brother Wilsoph :) heh but then I decided I wont do that...)

OK Im reall not an expert trader but if its worth heres what I think :

Swingtrading is a perfectly good way to trade/make/lose money. BUT! It really doesnt fit my personality. Firstly you have to really spend endless hours each night scrolling through charts (I used to do some 200 daily charts sometimes more than 60min, than 30 min etc.) and I would usually come up with too many plays. Id put my plays on screen the nex day at the open and my emotions would really destroy it all as noone can watch 20 charts on the open and jump in on some plays.

The approach was wrong. All I needed was say 5 stocks to watch with precalculated entry/exit/stop levels and just mechanically enter - place stop-walk away. But no, I had to turn on the 3min chart and get all worked up over every tick :mad:

Another thing to consider is I have only about 5000$ to trade with so If I size my positions to trade smart, keep R/R at 1:3, 1.5% risk etc I would end up with only say 60 shares of a stock so my profit potential is very limited from the beginning.

After really "examining" the way I think I have found that I prefer lesser risk thus lesser profits BUT more frequent. So basically DAYTRADING is what I think I should be doing. I may be completely off boat here but im the type of person that has to trry it to know it aint good. Course im not gonna jump outta the window to see Ill get hurt LOL!

What I am thinking as the last swingtrading approach that may work for me is overnight gap plays. My basic idea is to open the charts in say the last trading hour and look for most advanced/declined issues. Also Id limit myself to under 5$ crowd so I can pick up at least hundres shares and NOT risk being wiped out completely should they bacrupt overnight. Then Id go along with the momentum and hope for a gap my way (up if Im long) next morning and sell into that gap.

Also, the other thing Im considering since I really WANT to be able to daytrade is to start daytrading ES futures. I know ill probably get murdered but.... I just may make it, eh?! I dont have to pay the rent or the bills yet so I would be happy with 3-5 tics each day. Thats all, a couple of tics.

If there is anythink you like in this post, im glad if not... well sorry I couldnt help!

Alex
 
Like others on this thread, I am also getting started at Swing Trading. I have a couple of questions for the more experienced traders out there.

What sort of data and software would you recommend? I would like to keep the costs low without sacrificing effectiveness. Currently I am using TC2000 for end of day scanning. I feel the need for real-time intraday quotes and charts (someting like Quicken QQL), but I am not sure that a full-blown Level II system is necessary.

Like neo_hr, I sometimes get bogged down scanning for set-ups. I would be curious to hear how many of you actively scan for set-ups, and how many just concentrate on a few core stocks.

Any comments or suggestions would be welcome.
 
I trade with TC2000 and QQL (5 min chart subscription). That combination is perfectly adequate for swingtrading. All my trading is based on scans that get my stocks on watchlists and visual monitoring of the stocks once they are on the list.
 
I Agree with dufferdon, If UR serious about this then you cant go below QQL (at least this 5min chart option) for 20$/mo. Itas a must. You could try QT but as discussed on some other thread it lacks multiday intraday charting su...


Cheers
Alex
 
Originally posted by hrifraf


...Like neo_hr, I sometimes get bogged down scanning for set-ups. I would be curious to hear how many of you actively scan for set-ups, and how many just concentrate on a few core stocks.

Any comments or suggestions would be welcome.
More...

I'm probably in the minority, but I swing trade the same 10 stocks day in and out, but occasionally swap new ones in. This way I can find good swing trading stocks (rarely gap, consistent daily ranges that don't straddle the previous days, trend oriented, have sufficient volume, good volatility...) There are too many criteria that I look for to just scan and jump on new stocks every few days. The ones I follow have plenty of action up and down, and thats all I need. I believe this is the minority view in swing trading though. I also get confidence from backtesting these stocks with my method and know that CREE generated 24% in November, 15% in December and 38% in January. This allows me to sort out the best performing stocks via backtesting my system on them. Stocks have personalities as well, and its good to know them. For instance CREE loves to gap and then fade the last few months and MCAF Likes to take out intraday support points then reverse. Knowing these things allows you to adjust your handling of stops, etc.
 
I was going to recommend that you stick to swing trading while you are learning because daytrading will just accelerate the depreciation of your capital -- that is until you learn your method.
However, I think ddefina just gave some really good advice.
 
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