Who Thinks Swing Trading is Dangerous?

[schizo]

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I lost $2,500+/ more , but not more than 7-0r9 times;
Argentina Hi volume gamebird shoot. Plus ammo cost 5x what its in USA, but that's life.[Good thing for me i shot more than average in USA but less than average in Argentina/Uruguay]
I dont even really consider a vacation like that an undesirable loss .
Even though opportunity cost = more than that.
AS far as stock market/derivative markets;
they need to fraction contract chop ES like IBKR ad \$3,000AMZN price fraction chopped down to $25.Disclosure \nothing herein is a buy. Bid \ask most likely is more,but a lost less than an Argentina gamebird shoot
May not do any FRI-mon shorts or inverse related, many markets closed mon....

Personally, I'm not too "rattled" by how much I lost. That I can handle. But my biggest gripe is this. I opened a position as a swing trade but ended up closing it as a day trade. I initially wanted to hold the position for at least 3 days but the trade only lasted for a few hours.

I really want to transition from day trading to swing trading. I hate getting up at 6 in the morning. I hate staring at the computer all day long. And I hate the fact that I have so much things to hate.

 

[Bad_Badness]

I hate getting up at 6 in the morning. I hate staring at the computer all day long.

Versus watching 24 hours a day or being able to watch it 24/6. I have done both and frankly I enjoy the Day more because once I am out, I am totally done. Swing with ES is a "Check it all the time" proposition because it moves so much overnight, and opportunities come around at all hours.

 

[murray t turtle]

Holding overnight in this market is too dangerous until we fall to significant support levels or the trend clearly changes. Scalping is where its at and even that takes expertise in this market. Its very difficult but you have some great traders that understand it and can thrive.

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MSFT sometimes has very good trends;
find something like V-nyc +door dash.
So keep records, cash , dash, trash, treasure ;
+avoid stuff like SPXL or ES, especially during a slop chop+ backlash or useless trash trend.
Even though one of the best metals dealer i do business with, i think ripped me off about 1%,once ;but he pays so much better than some DASH type stocks, ok overall.

 

[schizo]

Versus watching 24 hours a day or being able to watch it 24/6. I have done both and frankly I enjoy the Day more because once I am out, I am totally done. Swing with ES is a "Check it all the time" proposition because it moves so much overnight, and opportunities come around at all hours.

My thinking is a little different. For me, swing trading is "get in the trade and forget it until either the PT or SL is hit". That's pretty much what I did yesterday. Although disappointed about the loss, I am more upset at the fact that it was over in like 2 hours as opposed to 2 days.

 

[qlai]

Now if you run ten swing trades simultaneously your risk is 0.10% x 10 = 1% of account eq. Any maybe your profit is in the range of 2-4% for these 10 positions.

This is one of the problems I encountered swing trading. I would wait (sometimes for months) for the market to be in a “good position” to enter - let’s say a pull back in a rising market. The problem is that stocks are highly correlated and, if you use TA, all will have similar pattern/look. So it was very hard to diversify. If market has adverse move, all positions would get a hit.

The next step was to do long/short but I had many instances where my longs would go down and my shorts would go up, a double whammy.

I thought of hedging, but it’s obviously expensive and I didn’t have enough edge on the swings to pay for hedging.

So, at least for me, I came to conclusion that TA by itself is not enough. Doesn’t mean it cannot be done, but I’m very suspicious of people who say they can predict 3-5 day moves consistently with tight risk.

@Handle123 has a mysterious way to hedge that he mentioned many times without sharing how or what percent of returns it costs him. I think he actually said he makes money on hedges, but I may be mistaken.

Everyone else seems to say that hedging is huge drag on returns. Someone here on ET had a great saying : “When you don’t have an edge, you need to hedge”

 

[deaddog]

This is one of the problems I encountered swing trading. I would wait (sometimes for months) for the market to be in a “good position” to enter - let’s say a pull back in a rising market. The problem is that stocks are highly correlated and, if you use TA, all will have similar pattern/look. So it was very hard to diversify. If market has adverse move, all positions would get a hit.

Why would a trader worry about diversifcation? I mean you don't want all your capital tied up in one position but 5 to 10 is more than enough.
When the market is rising there is usually no problem finding good positions. When the market is falling you want to be on the sidelines or short.

 

[schizo]

Why would a trader worry about diversifcation? I mean you don't want all your capital tied up in one position but 5 to 10 is more than enough.
When the market is rising there is usually no problem finding good positions. When the market is falling you want to be on the sidelines or short.

If I'm not mistaken, what he means is that those 5 to 10 stocks (actually about 80% of the entire stock universe) tend to trend in the same way. For example, when the index like Dow Jones and S&P 500 move up strongly, so will those 5 to 10 stocks. And vice versa when the indices go down. So, in essence, you're not really diversifying.

 

[Overnight]

...For example, when the index like Dow Jones and S&P 500 move up strongly, so will those 5 to 10 stocks. And vice versa when the indices go down. So, in essence, you're not really diversifying.

Indices are driven by stocks, not the other way around. When those 5-10 stocks that have a huge weight on the index go up or down, so will the index.

 

[deaddog]

If I'm not mistaken, what he means is that those 5 to 10 stocks (actually about 80% of the entire stock universe) tend to trend in the same way. For example, when the index like Dow Jones and S&P 500 move up strongly, so will those 5 to 10 stocks. And vice versa when the indices go down. So, in essence, you're not really diversifying.

That hasn't been my experience. Some stock run opposite to the market. 2022 saw energy and discretionary move opposite to the general market. As Cramer says there is always a bull market somewhere.

 

[schizo]

That hasn't been my experience. Some stock run opposite to the market. 2022 saw energy and discretionary move opposite to the general market. As Cramer says there is always a bull market somewhere.

And they are the other 20%.