Short term trading

N

Newc2

Hi a few questions to all you experienced traders. i would appreciate any input

1. "momentum precedes price" is a well known theory. So with that in mind wouldn't a short term move based on this be more of an edge in relation to milking the effect of that momentum?

2. What are traders called who buy the daily chart on Day 1 and then sell 1 to 2 days later? ie not scalpers and not swing traders. So what category?

3. Are there any well known traders who trade as above?

Thank you kindly
 
That would be swing traders. And if they enter on momentum day 1 and sell at exhaustion day 2 they would be called a no good dirty rotten momentum swing trader. Or at least that's what I call them. And no, there are not any well known traders, just salesmen and spokesmen.
 
java said:
That would be swing traders. And if they enter on momentum day 1 and sell at exhaustion day 2 they would be called a no good dirty rotten momentum swing trader. Or at least that's what I call them. And no, there are not any well known traders, just salesmen and spokesmen.
More...

Why 'no good dirty rotten momentum swing trader'?

If they have a 80% win rate on this with a 1.25 Reward to risk then wouldn't the ends justify the means?​
 
Newc2 said:

Why 'no good dirty rotten momentum swing trader'?

If they have a 80% win rate on this with a 1.25 Reward to risk then wouldn't the ends justify the means?​
More...
I was really dirty and rotten back when I was momentum swing trading. It was a good way to make money but the cap gains taxes just got too high even at 60/40 so I started fading and averaging down and I haven't had a tax problem since.
 
Newc2 said:
"momentum precedes price" is a well known theory.
More...


There may be something in that, but I tend to agree with Comagnum's observation just above.


Newc2 said:
wouldn't a short term move based on this be more of an edge
More...


"More of an edge" than some reasons for entering a trade, perhaps; but less than others.

Above all, don't confuse "entry signals" with "trading methods", though: "edge" applies to complete trading methods, rather than just to "entry signals". It may sound a bit pedantic, to point this out, but I think it's a pretty important distinction.


Newc2 said:
What are traders called who buy the daily chart on Day 1 and then sell 1 to 2 days later? ie not scalpers and not swing traders.
More...


Certainly not scalpers. Possibly swing traders, if they're using a swing-trading style over that sort of time-frame.

Whether or not trading is "swing trading" is not duration-dependent: there are fast-moving intraday swing traders, too. (The idea that "swing trading" is "something slower/longer than daytrading" is a very widespread misconception cleared up on page 1 of the standard, accredited swing-trading textbook - The Master Swing-Trader, by Alan Farley, and right at the start of several other swing trading texts, too.)


Newc2 said:
Are there any well known traders who trade as above?
More...


Yes - there are: there are some interviewed by Jack Schwager in his Market Wizards books, and those guys were mostly specifically selected because they're so well-known (and any who weren't probably are now, after the success of the books ;) ).
 
Taylor from 1950s made a book on Swing trading base on Momentum, has nothing to do with volume, and volume is not IMO a driver of price, I believed lack of volume has small edge towards ends of move, there can be huge volume and price just stands there, but momentum you can see price moving and yes, sometimes can be caused by lack of volume but it is moving, might not be the best risk adverse trade though, just cause you can get in does not mean you can get out with a profit if no one going to take other side at what you see on screen.

And in later years Linda Raschke sold it as well.
http://trading-naked.com/library/ra...ke - swing trading - rules and philosophy.pdf

Raschke has some nice filters in that pdf, but clue for Swing trading, must be already in a trend and not to put on while it driving in strong trend cause nothing is strong when you get in, I have automated version of Taylor as I have used a number of filters to reduce the number of trades, then trade credit spreads. But to trade Taylor Technique as he wrote it, never tested out well for me cause this type of timing is never going to be good enough for me to trade it as he wrote it.
Whereas Credit Spreads are much more forgiving if system delivers less than happy entry.
 
bigspeculate said:
Could you expand on that? How does volume precede price?
More...
%%
Exactly right; no one gets filed [price] unless you name the volume, on your order.
Also, we have seen , on GE candle chart , do a ''+'' on huge daily spike volume; translation= it went nowhere more or less on record spike volume.And continued its uptrend later in the month.

TA is the study of price + volume, that is the alphabetical order, price before volume, both help.
 
You must log in or register to reply here.
Back
Top