Well, actually I've been trading for about a year now and still have quite a learning curve to get over. I wanted to say hello and ask a question. I was primarily a swing trader, but have joined the darkside into the hardknocks world of day trading. I was wondering in our current market state (possibly an overbought market) do traders generally change their styles. For example would daytraders have moved over to swing trading once a strong trend started in April? Or is it safer to stay on the day trading side regardless of market conditions so that you have no overnight positions? Or do some day traders practice a combination of the two...ala Tony Oz? Or yet do day traders shift their strategies in overbought/oversold markets? I'm trying to keep my trading as simple as possible and use strict risk management to try to stay afloat during the learning curve. Thanks for listening...hope to get some replies.
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Swing vs. Day & New Trader-Haub
- Thread starter haub
- Start date
As a new trader I'm trying to manage a transition to swing trading. I think daytrading is the worst thing a new trader can do. How can you profit off an intraday trend if you can't first demonstrate the ability to profit off of a larger intermediate term trend. Besides the commisions and slippage will kill you.
Not saying intraday trades should always be avioded, sometimes a good opportunity may present itself; but only big trends can generate big profits.
Not saying intraday trades should always be avioded, sometimes a good opportunity may present itself; but only big trends can generate big profits.
Quote from haub:
Well, actually I've been trading for about a year now and still have quite a learning curve to get over. I wanted to say hello and ask a question. I was primarily a swing trader, but have joined the darkside into the hardknocks world of day trading. I was wondering in our current market state (possibly an overbought market) do traders generally change their styles. For example would daytraders have moved over to swing trading once a strong trend started in April? Or is it safer to stay on the day trading side regardless of market conditions so that you have no overnight positions? Or do some day traders practice a combination of the two...ala Tony Oz? Or yet do day traders shift their strategies in overbought/oversold markets? I'm trying to keep my trading as simple as possible and use strict risk management to try to stay afloat during the learning curve. Thanks for listening...hope to get some replies.
Not only is strict money management vital but if you don't already do so I'd recommend starting with as small a size as possible in whatever you are daytrading. Even now if I'm looking at a new setup I'll trade 100 shares or a one lot for the first month and evaluate my progress - if things are looking good then I'll double my size every month until I'm trading a full position.
I trade a combination of swing and day but in my case I've found that swing is where I can really make the money. It then really comes down to the enivronment as to how aggressively I want to press the swing trading. For instance I happen to be going into tomorrow flat. As it's a Friday going into a holiday week I'm really not that keen on initiating more than one maybe two swings over the next few days. Therefore my bias will be more towards daytrading until the 7th. Hope this is of some help.
As a short term trader, I don't form a strong opinion and take action based on price levels. My only concern is to recognize market action that leads the market higher or lower. Price levels are something value investors have learned. I have no conception of overbought or oversold. If I'm watching a market and I believe it is topping I may say to myself, "this could possibly be a turning point". Then either I exit longs/enter shorts, or I wait for confirmation if the market action is slow. I don't think knowledge like, the market is selling at 2X it's historic P/E or GM has a unfunded healthcare mandate equal to 3X it's market cap. has much value for a short term trader.
The mantra of the short term trader is "The market is what it is and will do what it will do". We just try to anticipate and capitalize on the opportunities as they present themselves.
The mantra of the short term trader is "The market is what it is and will do what it will do". We just try to anticipate and capitalize on the opportunities as they present themselves.
Quote from acrary:
As a short term trader, I don't form a strong opinion and take action based on price levels. My only concern is to recognize market action that leads the market higher or lower. Price levels are something value investors have learned. I have no conception of overbought or oversold. If I'm watching a market and I believe it is topping I may say to myself, "this could possibly be a turning point". Then either I exit longs/enter shorts, or I wait for confirmation if the market action is slow. I don't think knowledge like, the market is selling at 2X it's historic P/E or GM has a unfunded healthcare mandate equal to 3X it's market cap. has much value for a short term trader.
The mantra of the short term trader is "The market is what it is and will do what it will do". We just try to anticipate and capitalize on the opportunities as they present themselves.
you said it perfectly. as a daytrader, you are just working in a smaller fractal of the swing trader's chart. things move quicker and yes, we have to worry about news, #'s at 10am etc... but rarely do we worry about the overall direction of the market on a daily chart. the longest time chart on my screen is a 377 tick chart, which is anywhere from a 5-7 minute chart, depending on the volume.
i think the quickest way to learn how to trade properly is to daytrade. its the shortest learning curve of them all. if you could bat in the fast pitch cage, you would have no problem batting in the slow pitch, albeit you would have to adjust a bit. you could try for years working on the slow pitch cage and then move to the fast pitch and get slaughtered. make sense? unfortunately, many new traders run right into the fast pitch cage without a helmet, or with any idea how much work one must put into mastering it.
Thanks everyone for your replies. I think I'm going to start papertrading a joint strategy to somewhat 'diversify' between day trading and swing trading. The only problem I'm seeing so far is I'm getting stopped out alot on the day trading side. I'm going for a 3:1 ratio of profit/loss meaning that I'm getting stopped out at 1% on alot of trades, but when I hit one I'm getting about 3%.
Am I getting whipsawed an unrealistic sense of what my stops should be at? I'm basically using high volatile Naz stocks trading over 1 million shares per day and am trading breakouts and pullbacks depending on the 5 minute COMPX chart.
Am I getting whipsawed an unrealistic sense of what my stops should be at? I'm basically using high volatile Naz stocks trading over 1 million shares per day and am trading breakouts and pullbacks depending on the 5 minute COMPX chart.
Quote from haub:
Thanks everyone for your replies. I think I'm going to start papertrading a joint strategy to somewhat 'diversify' between day trading and swing trading. The only problem I'm seeing so far is I'm getting stopped out alot on the day trading side. I'm going for a 3:1 ratio of profit/loss meaning that I'm getting stopped out at 1% on alot of trades, but when I hit one I'm getting about 3%.
Am I getting whipsawed an unrealistic sense of what my stops should be at? I'm basically using high volatile Naz stocks trading over 1 million shares per day and am trading breakouts and pullbacks depending on the 5 minute COMPX chart.
there is no magic answer. you must practice. lots of experience will solve this. be sure to watch the time&sales while you are entering, NOT level ii. see what tends to happen when you get 'shaken out' of your position as opposed to when it goes your way. remember, you are competing with much more professional traders on the intraday level. there are more tricks, more things to watch out for when you are playing this field.
Quote from haub:
Thanks everyone for your replies. I think I'm going to start papertrading a joint strategy to somewhat 'diversify' between day trading and swing trading. The only problem I'm seeing so far is I'm getting stopped out alot on the day trading side. I'm going for a 3:1 ratio of profit/loss meaning that I'm getting stopped out at 1% on alot of trades, but when I hit one I'm getting about 3%.
Am I getting whipsawed an unrealistic sense of what my stops should be at? I'm basically using high volatile Naz stocks trading over 1 million shares per day and am trading breakouts and pullbacks depending on the 5 minute COMPX chart.
It's probably going to take trial and error for you to get a good sense of where these should be. Based on my experiences I'd say 3:1 R:R is a little ambitious intraday. You may want to think about taking partials before then and getting your stops to breakeven. As far as stops are concerned I'd say that on trading breakouts you'll probably be ok using 1% (if you are doing it right then the breakout point should be support on a retest). As far as retracements are concerned if it's say a flag you are trading then the standard place for the stop is just below the set up bar. Remember however if you do this then your stop will be with everyone else who is playing the flag and is there to be shot at!
Quote from haub:
Thanks everyone for your replies. I think I'm going to start papertrading a joint strategy to somewhat 'diversify' between day trading and swing trading. The only problem I'm seeing so far is I'm getting stopped out alot on the day trading side. I'm going for a 3:1 ratio of profit/loss meaning that I'm getting stopped out at 1% on alot of trades, but when I hit one I'm getting about 3%.
Am I getting whipsawed an unrealistic sense of what my stops should be at? I'm basically using high volatile Naz stocks trading over 1 million shares per day and am trading breakouts and pullbacks depending on the 5 minute COMPX chart.
I never trade more than 10% of a given issue on a day. How many stocks do you trade to get to a million shares a day.?