Who Thinks Swing Trading is Dangerous?

[schizo]

i like swingtrading etfs since no earnings misses risk

Depends on the ETF. If you're talking about SPY, it sure will take a hit if any of these company tanks, especially AAPL.

SPY Top 10 Holdings

• Apple Inc. 6.71%
• Microsoft Corp. 5.70%
• Amazon.com Inc. 2.54%
• Alphabet Inc Class A. 1.66%
• Berkshire Hathaway Inc Class B. 1.62%
• NVIDIA Corp. 1.60%
• Tesla Inc. 1.58%
• Alphabet Inc Class C. 1.48%

 

[schizo]

Generally, in my own trading, I find that it's better to take a small or medium sized loss and re-enter immediately (or shortly after) if I still feel my original trade idea is in play. Typically, if my stop is hit and price slows down or reverses. If price bursts through my stop, well, then my hypothesis may have been invalidated and I'll wait or consider reversing.

Those are all valid points, which I'm well aware of. But that sounds more like day trading than swing trading to me.

 

[deaddog]

Those are all valid points, which I'm well aware of. But that sounds more like day trading than swing trading to me.

The only time I day trade is when a swing trade hits my stop the day I entered.

 

[murray t turtle]

Only in theory. In practice, it never works that way. If what you say is true, whenever AAPL moves up, then so will the Dow. But the Dow and S&P move in tandem and when one of them swoons so will the other.
WTF??!!

%%
FRANKLY you are right ;
mostly. But in past 50 years Overnite is more right;
DOW diverges 5-10% of the time , 50 years= and it makes sense=no way is Dow30 the same as SPY[S&P 500]. So never say never ;when its just a hi% .
Even YTD notice the difference in % gains, DOW+ SPY= not even close%.
YES i see the WSJ stack the SPY/DIA/NQ line charts on top of each other all the time
And his point was also ''stocks'', not just a stock.
SCHW does have a button ''sell all'' LOL Good comment
[Edit i dont use the ''sell all'' button all the time= to many differences; oil stocks last year.........]

 

[schizo]

The only time I day trade is when a swing trade hits my stop the day I entered.

That's exactly what happened to me the other day.

There are many flaws I see with swing trading in this current market, but these two alone are sobering enough to keep me out:
1) Unless your entry is impeccable, you'll surely get stopped out.
2) Even if your entry is impeccable, unless you take your profit immediately or have a huge stop, you will likely get stopped out with such large intraday chops.

 

[schizo]

Consider the following chart. Trade initiated after the breakout. One is right after it happened intraday, the other as MOC. Stop was placed below the low of the bar. Both were stopped out. Maybe breakout momentum is not the best strategy. Speaking of which, what strategy do you use for swing trading? Momentum? Mean reversion? Lunar?

 

[deaddog]

That's exactly what happened to me the other day.

There are many flaws I see with swing trading in this current market, but these two alone are sobering enough to keep me out:
1) Unless your entry is impeccable, you'll surely get stopped out.
2) Even if your entry is impeccable, unless you take your profit immediately or have a huge stop, you will likely get stopped out with such large intraday chops.

ES and individual stocks are a different animal.
No data to back this up but I'd hazard a guess that individual stocks trend better.

 

[hilmy83]

Consider the following chart. Trade initiated after the breakout. One is right after it happened intraday, the other as MOC. Stop was placed below the low of the bar. Both were stopped out. Maybe breakout momentum is not the best strategy. Speaking of which, what strategy do you use for swing trading? Momentum? Mean reversion? Lunar?

View attachment 306706

What's the logic of putting a stop at the breakout bar low?

 

[schizo]

What's the logic of putting a stop at the breakout bar low?

In my mind, it's a failed breakout (eg. head fake). That's how I would trade as a day trader.

 

[hilmy83]

In my mind, it's a failed breakout (eg. head fake). That's how I would trade as a day trader.

So basically in you mind a good trade is only when it shoots straight out of the level without the "headfake" retracements. Which is fine if you're trading volatiltiy breakout, but you're using daily charts, so I'm not sure why you think that was a good place to put stops.

I would do something like this.