One of the reasons I like Position Trading

[monee]

Another point I found on Swing trading verses intraday trading is
it is much easier to have lapses in discipline when intraday trading.
Swing trading after I enter I place a stop and usually leave.

 

[cnms2]

I understood you the first time. I just wonder if you have data, or knowledge of a study that has data, supporting your observation.

There are studies pointing that different factors predominantly determine the price action intraday (market internals) compared to those that determine the prices in the higher time frames (market externals like news). There is also the discontinuity between market closing and the next day opening, that adds additional noise to swing trading.

Quote from Buy1Sell2:

The frequency of a bullish divergence or bearish divergence being right is much higher on the longer charts, and of course points to bigger sustained moves. Other technicals are stronger as well , like RSI moving up from the OS line--it's more often right on the larger charts and the moves are better sustained. My belief is that the daily bars and the weekly bars are more powerful because I believe that a lot of the professional position traders do their trading end of day not on the open. The amateurs in large part trade opens and during the day making those closing prices on intraday bars much much weaker.

 

[Buy1Sell2]

Quote from cnms2:

I understood you the first time. I just wonder if you have data, or knowledge of a study that has data, supporting your observation.

There are studies pointing that different factors predominantly determine the price action intraday (market internals) compared to those that determine the prices in the higher time frames (market externals like news). There is also the discontinuity between market closing and the next day opening, that adds additional noise to swing trading.

I guess what I sould say is that the market technicals that I use are better, at least for me, on longer charts. No study to give out here, except my own experience and perception. Sorry, I misunderstood your meaning earlier. Hope this clarifies.

 

[Kensho]

Assume YM as trading vehicle and a random entry with profit target at 2x the stop loss.
Now the guy with 5/10 tick stop-loss/profit-target is the scalper/daytrader.
The guy with a 50/100 tick stop-loss/profit-target is the position/swing trader.
And the guy with a 500/1000 tick stop-loss/profit-target is the investor.

But its all essentially the same strategy and the guy with the most discipline will probably come out ahead.

 

[Buy1Sell2]

I also find the risk to reward ratio much easier to achieve in the longer time frames. I believe this to be due to a more relaxed let it ride perspective.

 

[cnms2]

It may be correct for your trading approach, but the longer time frame price envelopes are proportionally narrower than the shorter time frame ones.

Draw an envelope that barely includes all the price points on a weekly chart, one on a daily chart, one on a 30 minute chart, and one on a 5 minute chart.

You'll notice that the ratio between the envelopes is less than the ratio between time frames. If you increase your time frame 5 folds (daily to weekly), a daily envelope of i.e. $2 will not become $10, but something closer to $4.5.

This suggests that as you go down towards smaller time frames, proportionally there's higher potential of making money.

This also suggests that market characteristics change between time frames, longer time frames being more suited for counter-trend trading, shorter ones for trend trading.

Another aspect to consider is compounding: longer time frame means less trading opportunities, hence making money slower. On the other hand shorter time frame, less absolute price swings, means higher slippage and commissions impact.

Quote from Buy1Sell2:

I also find the risk to reward ratio much easier to achieve in the longer time frames. I believe this to be due to a more relaxed let it ride perspective.

 

[LoosenUp]

Quote from cnms2:

It may be correct for your trading approach, but the longer time frame price envelopes are proportionally narrower than the shorter time frame ones.

Draw an envelope that barely includes all the price points on a weekly chart, one on a daily chart, one on a 30 minute chart, and one on a 5 minute chart.

You'll notice that the ratio between the envelopes is less than the ratio between time frames. If you increase your time frame 5 folds (daily to weekly), a daily envelope of i.e. $2 will not become $10, but something closer to $4.5.

This suggests that as you go down towards smaller time frames, proportionally there's higher potential of making money.

This also suggests that market characteristics change between time frames, longer time frames being more suited for counter-trend trading, shorter ones for trend trading.

Another aspect to consider is compounding: longer time frame means less trading opportunities, hence making money slower. On the other hand shorter time frame, less absolute price swings, means higher slippage and commissions impact.

Yes, I agree. Commissions and slippage have a very important impact on short term trading. Hence, one has to be very selective, and that means being disciplined. Longer term trading has the disadvantage of much larger stops required and therefore, can't be as aggressive. Because of the higher number of opportunities, shorter term trading with edge will have smoother equity curves. Longer term trading, although ultimately profitable(hopefully), might have higher equity curve gyrations, most of the time. One must be prepared for longer periods of non- equity highs, and that is not always easy.

 

[Load_the_boat]

Quote from Buy1Sell2:

I also find the risk to reward ratio much easier to achieve in the longer time frames. I believe this to be due to a more relaxed let it ride perspective.

Yes, also agree what you said about the technicals working better on longer time frames as well. You can trade multiple markets easier too imo.

 

[Buy1Sell2]

Quote from cnms2:


This suggests that as you go down towards smaller time frames, proportionally there's higher potential of making money.

It is also more likely to catch false moves on the shorter time frames which may negate the ability to actually make more money. Technicals are much more reliable on the the longer frames.

 

[cnms2]

I see these differently, but whatever works for you is fine.

Quote from Buy1Sell2:

It is also more likely to catch false moves on the shorter time frames which may negate the ability to actually make more money. Technicals are much more reliable on the the longer frames.