Switching from scalping to swing. Suggestions?

D

Dr_Explode

This may be a long shot, but I'd like to throw this out there.

I come from a prop background that focuses on scalping, and I'm looking to move to swing trading. I know scalping is great for some, but it definitely does not fit my personality. A few years of this and I am exhausted.

The problem is, I need leverage, and I am not interested in putting anything more than 5k down, if that even. Does anyone know of firms out there that offer the ability to hold trades for several days on top of day trading, without forcing compliance with the pdt rule? AND that offer good leverage? The leverage I had previously was $250,000, but I could probably do with $150,000 without problems.

My previous deal granted me .004/share on 95% payout, which is decent. I'd be fine with an increase in rates since I expect to be doing less than my normal 70,000 shares a day (hopefully).

Basically I just want some more freedom to branch out to different styles without having to contribute an exorbitant amount of capital.
 
Please send PM to Don Bright. Btw, why chose Swing Trading and not Momentum Trading?

Quote from Dr_Explode:

The problem is, I need leverage, and I am not interested in putting anything more than 5k down, if that even. Does anyone know of firms out there that offer the ability to hold trades for several days on top of day trading, without forcing compliance with the pdt rule?
More...
 
here a suggestion, as I swing trade (last fifteen years), if your method of holding between 1-5 days is perfect for option trading.
I would suggest becoming more familiar with options, buying calls and puts is a great way to leverage on short term swing trades. This has worked for me and several years ago, I made a nice bundle that allowed me to use the profits to swing trade stocks.
You might want to do some paper trades first in timing the markets and then explore the different strikes and expiration months. Remember not all stocks have options, therefore, you'd waste lots of time looking for setups if they aren't optionable.
Good luck, besides, scalping is a waste and will only make your broker rich

best,
Oliver
 
Quote from bitrend:

Please send PM to Don Bright. Btw, why chose Swing Trading and not Momentum Trading?
More...

I've thought about Bright actually, although I've heard rates tend to be a bit high. Depending on what info I get about certain firms I might PM him.

How do you define momentum trading? I've always thought of it as breakouts or breakdowns, regardless of the holding period. I'm just looking to hold trades occasionally for 3 days or more.
 
Quote from oliver777:

here a suggestion, as I swing trade (last fifteen years), if your method of holding between 1-5 days is perfect for option trading.
I would suggest becoming more familiar with options, buying calls and puts is a great way to leverage on short term swing trades. This has worked for me and several years ago, I made a nice bundle that allowed me to use the profits to swing trade stocks.
You might want to do some paper trades first in timing the markets and then explore the different strikes and expiration months. Remember not all stocks have options, therefore, you'd waste lots of time looking for setups if they aren't optionable.
Good luck, besides, scalping is a waste and will only make your broker rich

best,
Oliver
More...

Very interesting suggestion. You're suggesting buying options only, and only to hedge swing trades?

Much appreciated. I'll mentally bookmark this idea.
 
Quote from bitrend:

You jump on the fast moving train, that's very profitable and extremely dangerous.:D

http://www.investopedia.com/articles/trading/02/090302.asp
More...

Ah right. I already incorporate that into my normal style, except those trades tend to be more rare (thus quick dimes are a normal routine). It's too hard to focus only on momentum as there's a lot of waiting involved, unless you have a good filter. Basically I'd prefer to keep that option open, with swing as well, without having to worry about the pdt rule.
 
If I may put in my 2 cents:

If your looking to hold trades lesss then a week directionally, there are 2 best ways to accomplish this. 1st is by using frontmonth deep ITM options as a substitue for stock. Because they are deep ITM, they trade like stock with a built in predefined amount that you can lose. Vega and theta are also minimized.

2nd way is to use OTM options around a delta of 30. Frontmonth will have more liquidity, hence tighter B/A, but high theta is the price. You may want to try going the 2nd month out. You sacrifice some gamma, but that's the tradeoff for lower theta.

Out of those 2, the OTMs are more complex, but also offer the highest R:R. If your looking to keep it simple and just want a stock sub, as most do, use the deep ITM options.
 
Quote from jj90:

If I may put in my 2 cents:

If your looking to hold trades lesss then a week directionally, there are 2 best ways to accomplish this. 1st is by using frontmonth deep ITM options as a substitue for stock. Because they are deep ITM, they trade like stock with a built in predefined amount that you can lose. Vega and theta are also minimized.

2nd way is to use OTM options around a delta of 30. Frontmonth will have more liquidity, hence tighter B/A, but high theta is the price. You may want to try going the 2nd month out. You sacrifice some gamma, but that's the tradeoff for lower theta.

Out of those 2, the OTMs are more complex, but also offer the highest R:R. If your looking to keep it simple and just want a stock sub, as most do, use the deep ITM options.
More...

I am very new to options since I haven't had the capability to trade them. I don't yet understand theta/vega, etc. or the pricing of OTM options, so it'll take a bit of study first. But it's great to get a range of ideas first as a headstart. Much appreciated.
 
You must log in or register to reply here.
Back
Top