Which is More Profitable - Swing Trading or Day Trading?
- Thread starter mazotrade
- Start date
investing is where the big $$$ is at... 
Hello:
It has become clear that people who post these questions do so because they are beginners or because they are having problems making a dollar. If the shoe fits, I hope you will be patient and continue to give this your best effort:
While I am sure that your question is an important one, it should be made clear to you that there are traders who make good money both ways, swing trading and intraday trading. My own opinion is that it is more important to learn how to obtain a tradeable "edge". Ultimately this is more important than the duration of the trade.
On the other side, successful traders like Larry Williams claim that swing trades are more likely to provide good profits. Mr. Williams who is known primarily for turning $10,000 into a million in a contest a few years ago, argues that you have to give your trades sufficient time to produce profit. I don't agree and I notice that in a recent interview, Mr. Williams talks about classifying entry patterns by how quickly they deliver profits. Apparently he has had a change of heart.
The best advice I can give is to look at trading as one facet of a diversified portfolio. If you do this, you will try to have some money in longer term investments, some in shorter term investments. All good professional money managers acknowledge that this approach moderates risk and gives the investor the best chance of making a dollar over the longer term. Also it seems to be more tax efficient. Good luck. Steve46
It has become clear that people who post these questions do so because they are beginners or because they are having problems making a dollar. If the shoe fits, I hope you will be patient and continue to give this your best effort:
While I am sure that your question is an important one, it should be made clear to you that there are traders who make good money both ways, swing trading and intraday trading. My own opinion is that it is more important to learn how to obtain a tradeable "edge". Ultimately this is more important than the duration of the trade.
On the other side, successful traders like Larry Williams claim that swing trades are more likely to provide good profits. Mr. Williams who is known primarily for turning $10,000 into a million in a contest a few years ago, argues that you have to give your trades sufficient time to produce profit. I don't agree and I notice that in a recent interview, Mr. Williams talks about classifying entry patterns by how quickly they deliver profits. Apparently he has had a change of heart.
The best advice I can give is to look at trading as one facet of a diversified portfolio. If you do this, you will try to have some money in longer term investments, some in shorter term investments. All good professional money managers acknowledge that this approach moderates risk and gives the investor the best chance of making a dollar over the longer term. Also it seems to be more tax efficient. Good luck. Steve46
larry williams is very very wealthy.....
not because hes a great trader, but because hes a great
BOOK SALESMAN!!!!!!!!!!
My,
Good point.
I come from the perspective of a day trader who just trades good time periods in my chosen markets and have a flexible view of how long to hold so I missed that. I trade euro in the European morning and US morning to try and get the maximum movement from it. I will hold a proportion of my position longer term if there is a good longer term trend and I am well positioned for it. So I guess I need to rephrase my opinion
1) if you trade a smaller fractal you can theoretically earn more
2) this is offset by the gaps to the next "day"
3) this is offset by dealing costs and relatively larger slippage (vs win size)
4) this is enhanced because a smaller stop can provide larger proportional returns for a given point move.
But like others I trade eod, half hourly and one sub 5 minute timeframes to spread my risks.
Good point.
I come from the perspective of a day trader who just trades good time periods in my chosen markets and have a flexible view of how long to hold so I missed that. I trade euro in the European morning and US morning to try and get the maximum movement from it. I will hold a proportion of my position longer term if there is a good longer term trend and I am well positioned for it. So I guess I need to rephrase my opinion
1) if you trade a smaller fractal you can theoretically earn more
2) this is offset by the gaps to the next "day"
3) this is offset by dealing costs and relatively larger slippage (vs win size)
4) this is enhanced because a smaller stop can provide larger proportional returns for a given point move.
But like others I trade eod, half hourly and one sub 5 minute timeframes to spread my risks.
Most "Day Traders" Do not have to sell or cover their positons at the end of the day. I myself trade over 100,000 shares a day and make some money but I also hold stocks for 3days-3 months. SIE is a perfect example of a stock giving me nice profits. But I also got caught in the UHS gap down back in March.
The fact is you can make great money doing either or both but remember you can lose large amounts doing both! Like I always say, "you can trade on Technicals all you want but technicals can never show you when bad news or good news is gonna be released"
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Maz otrade;
Generally dont trade as much during a sideways trend [aka range];
a skilled small time frame trader can do better for sure there.
The skill of the trader is more important than the timeframe;
the total amount of money traded on nonday trades is probably closer to 80% or more
than the smaller amount daytraded.
Theoreticaly a skilled daytrader could make more than a
skilled longer time frame trader;
when the best of the best are studied [Jack Schwager interviews]-
the longer time frames win .
Wisdom is the principal thing.
Solomon, trader king
sorry for being dumb, but what is swing trading exactly?
Exactly.
Unfortunately, there's STILL after all these years a lot of misused terminology. The perception(even among some ETers) seems to still be that "daytrading" means "scalping" - hence the comments about 10 cents here and there.
Scalping is by definition going to be daytrading, but daytrading is not exclusively scalping.
"Daytrading" is just about being flat at the end of the day - it says nothing about the methods used. While scalping is a trading method that is implicitly very short term, "swing trading" is a timeframe-independent method. So as mfhboy notes, you can definitely swing trade intraday - still daytrading, just not scalping.
So an intraday swing trader who catches a good move can be in a single "daytrade" for 10+ points on the ES. If they close the position by the end of the day - they're daytrading. If they decide to let it carry overnight, they've simply extended what started out as an intraday swing trade into a multi-day swing trade.
On the other hand, it seems that many people who say "swing trading" are more often than not really talking about approaches that should be called short term investing rather than swing trading.
My tupence anyway.