Short term trading vs. long term trading

[ElectricSavant]

Well true, but again daily bars represent these levels more clearly, because many traders use daily ohlc as a benchmark.

Michael B.

p.s. many indicators were designed for daily bars and are more efficient than to use those same indicators for shorter term. In fact many are designed around the more reliable ohlc of the daily period. But again, you can trade by price action if that is your style. I use price action and patterns together with indicators for confirmation. But really S/R, fib level levels/retracements and time of day are most important to me.

Quote from neutrino:

More vs. less random perhaps ?

I tend to think that since the price has a fractal structure it would be equally difficult or easy to profit from different time frames. However since there are less traders that shape the smaller fractals, they would be probably more chaotic. Any individual trader would influence the price to a higher degree...

 

[neutrino]

Quote from Grob109:

short : long

50:1 historically.

What does this mean? Thanks.

 

[abogdan]

The sum of all the squiggles is always greater than a straight line connecting the ends!

 

[Grob109]

Quote from neutrino:

What does this mean? Thanks.

I trade with limited capital in intraday futures. That is the short operation for me.

For equities, I use streams of money to use up all my capital. That is because I have an upper limit of shares in any one investment. That is the long operation for me.

If I take an equal basis in capital to compare results, I get a ratio.

Intradaytrading in futures is better than position trading in equities. I make 50 times the profits in intraday than in position trading. 50:1.

I do not consider the opportunity cost because it is negligible.

I move capital from intraday to equities.

I have spent years and years optimizing how to do things in each arena.

Yesterday, I had one partial fill (bar 60, 14:26 approx) situation on an ES trade. It may take me 30 trades to exit a max position in equities. This is because of two things: I do not trade more than 10% of cumulative daily volume nor do I trade in blocks larger than those showing on T&S in real time. You may see from this that I am at an edge vis a vis efficiency. No one is able to make a lot of money if they are using too much money in a given play.

 

[Grob109]

Quote from abogdan:

The sum of all the squiggles is always greater than a straight line connecting the ends!

How about that!!!!

 

[Cheese]

"The sum of all the squiggles is always greater than a straight line connecting the ends! " abogdan

Amen. As well.

Or the sum of the parts is (far) greater than the whole.
Day trading (ie DOW index futures) .. way way the easy winner!

 

[T-REX]

Daytrading gives you the opportunity to be wrong many times over thus taking many small loses that can equal one very big loss over time. Also you have to babysit every tick and intraday price bar.

Swingtrading gives you the flexibility to exit on the close and go home flat at the end of the day. So if you treat ALL of your swingtrades as initial daytrades then you can scale out of your positions thus booking profit on the initial day of entry while allowing your winners to ride as well.

If you feel that the mkt is going to retrace a bit and don't want to get stopped out of the swingtrade then just enter some daytrades in the opposite mkt.

Example: swingtrade short position in NQ
take some daytrades in ES to capture intraday long opportunities on minor retracements.


SWINGTRADING IS KING!

T-REX

 

[reg]

The one aspect of swing trading that I find really hard to deal with is the overnight risk. You may be long a stock and you wake up the next morning to find out that there was bad news on the stock - analyst downgrade, accounting irregularity, anticipated missed earnings, etc. This kind of event could wipe out most of your previous profits or even your account.

 

[T-REX]

Quote from reg:

The one aspect of swing trading that I find really hard to deal with is the overnight risk. You may be long a stock and you wake up the next morning to find out that there was bad news on the stock - analyst downgrade, accounting irregularity, anticipated missed earnings, etc. This kind of event could wipe out most of your previous profits or even your account.

I trade Forex, ES, NQ, YM Stock Index Futures so I don't have that problem. Also I do not hold over unless I have some good intraday profit cushion. That way I'm playing with the houses $$$ so to speak. If my stoploss gets triggered........SO WHAT!
I will take my next signal when it comes.
I am proud of my loses as I am of my winners.

When you have a winning system the loses are a part of doing buisness. nothing more nothing less.

Comes with the territory.
Risk pays.

T-REX

 

[lindq]

Quote from reg:

The one aspect of swing trading that I find really hard to deal with is the overnight risk. You may be long a stock and you wake up the next morning to find out that there was bad news on the stock - analyst downgrade, accounting irregularity, anticipated missed earnings, etc. This kind of event could wipe out most of your previous profits or even your account.

I've found over the years that there are more upside surprises than downside. One key is staying diversified and carrying a number of positions whenever possible. You can't simply take a daytrader's mentality of carring a heavy position in a single stock and moving it to a longer timeframe. You need to be in a position that if a stock does take a hit, it is a minor shock and not a big one.