Swingtrading Versus Daytrading Debate

C

candletrader

I am interested in generating a debate on the merits of swingtrading versus daytrading.... I would personally define swingtrading as holding periods of anything from an overnight hold to a few weeks (please feel free to disagree)... daytrading is strictly intraday for the purposes of this debate...

Any pertinent comments are welcome....

Issues for consideration include:-

  • the ambiguity of intraday noise versus the uncertainties of longer time frameworks
  • the pressures of intraday trade detection and monitoring
  • time commitment issues
  • risk considerations, including overnight adverse gaps
  • issues related to overtrading and commissions
  • earning power of daytrading versus swing trading
  • the psychological need for immediate gratification
  • any other issues of interest

It would be nice to get a real debate started between avid supporters of the intraday approach and avid supporters of the swingtrading approach...

For a quick summary of where we stand as a group, it would be nice if participants would also make a vote on their preferred style...
 
Addiction, Addiction, Addiction!!!!!

The normal progression with trading over time is to shorten one's time frame. We may rationalize that technology or ECNs have made it possible, but I feel unless an outside influence deters us, we all 'ring the register' quicker each market cycle. And it's not necessarily performance issues, because in my case,over a series of trades, there is no question that lengthening my 'holding period', regardless of whether it was a short or long positions, would have increased my profits immensely. How many times do we berate ourselves by saying if only I wasn't sitting in front of the damn screen...

Also, it is noise, and we fool ourselves into believing our brains are capable of filtering said noise. Just like golf one good shot makes us forget a bad round and keeps us coming back. If I'm correct' just imagine how we could improve the quality of our lives by lengthening our time frames.
 
With a market so sensitive to news, and after seeing some major gaps both ways recently, there is a LOT of chance involved in holding positions overnight right now. Maybe they will catch Bin Laden, and you are short the QQQ's....how would you be able to predict this, and if you could, hedge for it?? This is an ideal time to take advantage of a very news sensitive market, and holding overnight is a setup for disaster. Had Nick Leeson maintained his no overnight position rule, he wouldn't have lost over a hundred million pounds on the Kobe earthquake...
 
I voted majority daytrades but I should note that the majority of my profits come from swingtrades. I definitely prefer to swingtrade but there are times when daytrading is the safer play. Also I may not get a swingtrade buy/sell signal for a few days sometimes. So daytrading supplements my income in the meantime.


Tony
 
The only overnight holds I have are shorts. Unless a company takeover is announced you're much safer with gaps. I've seen gap downs of 25-50% but rarely do you see gap ups of more than 3-5% even on an analyst upgrade.

It's also a form of terrorism insurance; if there's an incident anywhere in the world and we get a gap down then at least my positions will benefit
 
Originally posted by Tony01
I voted majority daytrades but I should note that the majority of my profits come from swingtrades. I definitely prefer to swingtrade but there are times when daytrading is the safer play. Also I may not get a swingtrade buy/sell signal for a few days sometimes. So daytrading supplements my income in the meantime.


Tony
More...

Hi,

Given that you trade both styles, have you calculated where the majority of your commission-inclusive losses come from?

Candle
 
Personally I'm an advocate of swing trading. I like to see my positions evolve and there is a lot more room for marginal errors in timing.
Having said that, I think that sometimes people forget about one of the bigger expenses associated with swing trading - INTEREST.
If you trade on margin and you hold overnight the $ can really add up. No point hanging onto mediocre positions when you have to pay not only slippage and commission, but also the bank...

Just thought I'd mention it 'cause a lot of people seem to only talk about slippage and commission when they mention expenses.
 
Originally posted by candletrader


Hi,

Given that you trade both styles, have you calculated where the majority of your commission-inclusive losses come from?

Candle
More...

I'd have to say swing trades bring the majority of my losses. But since my wins are usually 2-3 times my losses I still prefer swing trading. My daytrades are more like 1:1 risk/reward. Also, I almost hate to say it, but I rarely lose in either style. :cool:


Tony
 
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