He gets out, then re-enters if rebound.
Who Thinks Swing Trading is Dangerous?
- Thread starter schizo
- Start date
1) No Breakout is not that great a strategy for this market, right? That is so full on bull market stuff
.2) Consider using a channel for entries-exits.
3) I used to use the Stop rule: Two lower bars - two points for long. Which would have been 3890 on the first entry, about 3915 on the second entry. Sort of Point and Figure style. Then go for a BE when it gets closer entry point.
4) Consider not using the wicks. i.e. you stop has to be violated after the close of the bar. The whole thing about swing trading is you have to "let it go" and not watch so closely, and act upon it, like day trading, to avoid the incessant volatility, especially in this market. Don't mix styles-tactics-threshold of action.
5) Consider using the fact that you can enter exit mid day, and evaluate at EOD. ala "how i made 2 million in the stock market" book style where the guy was getting price updates via telegrams on Fridays and placing orders on Monday.
But seriously, don't you have enough time into day trading?
Adding swing trades and you are really being committed! 
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That is not swing trading. That is day trading.
Hmmmm, not really my friend. If the re-entry works he'd probably let it run for as long as it trends, knowing Kenneth's strategy.
If a position you enter moves instantly against you, and you close it, and then re-enter that position soon after in the same day, that is not a swing trade. That is a day trade. A swing trade is a trade you enter and stay in, by standard definition, more than one day. Maybe this is all just semantics. Gratz Ken on his endless winning streak of both inverses and regular ETFs.
Darc, did you sign up for his courses in the past and find success with his methods, or are you just trying to defend him for some miscellany reason?
Wouldn't pay for a course, even from you. But I have learnt a few things from him on here, (including its socially acceptable to be a sex maniac).
Thanks for the pointers. I would need to maul over these and see if I can come up with some workable strategy. I've found out simply transferring the same day trading setup to swing trading doesn't jive well. Maybe it's just wrong time to dive in to swing trading.1) No Breakout is not that great a strategy for this market, right? That is so full on bull market stuff
2) Consider using a channel for entries-exits.
3) I used to use the Stop rule: Two lower bars - two points for long. Which would have been 3890 on the first entry, about 3915 on the second entry. Sort of Point and Figure style. Then go for a BE when it gets closer entry point.
4) Consider not using the wicks. i.e. you stop has to be violated after the close of the bar. The whole thing about swing trading is you have to "let it go" and not watch so closely, and act upon it, like day trading, to avoid the incessant volatility, especially in this market. Don't mix styles-tactics-threshold of action.
5) Consider using the fact that you can enter exit mid day, and evaluate at EOD. ala "how i made 2 million in the stock market" book style where the guy was getting price updates via telegrams on Fridays and placing orders on Monday.
Only thing I'll miss about day trading is the art of flipping. Not sure if I can do that with swing trading.But seriously, don't you have enough time into day trading?
Did you ever think it was not dangerous, especially in this current rollercoaster environment?Seriously, I really did try my best to swing for at least a few days, but I ended up losing big time...like the 60 point loss in ES today (that's $3,000 per contract) and I have no friggin' idea where I screwed up. I imagined 60 points should be more than wide enough to cushion any blows. But hell no.
Please don't tell me to tighten my stop. If I use a tighter stop, you might as well tell me to just go back to day trading.
I'm a newb and by no means an experienced consistently profitable trader so take what I'm stating here with a grain of salt, but this is an interesting conversation and here's my two cents. It's just the environment were in at the moment that is leading to a lot of crappy breakouts that fall to the downside shortly so after. I'm seeing it on numerous charts, so don't beat yourself over it. This environment is very difficult and not really attune with swing/position trading. I can't speak much for /ES since I don't have much experience with futures, but nonetheless the same principles apply (other than the fact that futures are super leveraged).
The best swing/position trades are the ones where you are right from the beginning, i.e. you initiate a trade and bam profit, and profits continue for days. Imo, when you know you're in profit that reduces some psychological stress, because now if things were to go to the downside, your losing the house's money not yours.
As Jesse Livermore used to say, I'm paraphrasing, but "traders attach fear and hope in the wrong places, when a trade goes your way and you're in profit, that's when you should be hopeful and let it run, but when trade doesn't go your way from the beginning that's when you should be fearful and likely exit." Obviously, the market environment plays a huge role in this, and maybe quicker exits are warranted in this shitty market, but you get the point.
Maybe I have a narrow definition of a swing/position trade, but my idea is that if an upside breakout doesn't hold up near the close of the day and the volume is weak, it's a failed breakout and if you traded it you were wrong, exit even if it doesn't hit your stop. Keep it in the watchlist and re-evaluate it if it still looks interesting. Even if it does breakout, it needs to be with conviction, clearly going above and closing above a recent resistance channel on strong volume.
I'm new to trading, but from my strategy so far...I don't buy immediate intraday pivot breaks. I typically like to enter mid to near end-day session to see if the breakout stays and has conviction, this probably gives me a worse entry, but my thinking is that's fine if the price appreciation follows for days, weeks, months, years.
A logical stop would be a little below the old resistance area, for some leeway, as price may retrace and test that level, and sometimes it can go past that resistance area on some liquidity clearing. From what I've seen though, in bull markets, this test to old resistance/new support doesn't really happen often, usually you see companies, typically small to mid caps like this explode to the upside after breakouts. If they don't that's okay, your stop may get hit, but you're losing less capital and can re-allocate it to the $$$ opportunities. Better this than having a loose stop where you think a breakout will lead to price advances and it doesn't and you end up losing a lot of money.
In bear markets, I think it's best to lower the position size so you can still afford to keep a tight stop, but nonetheless it's just not the kind of environment that is conducive to this kind of trading. Price appreciation following a breakout is less of a guarantee when you have the market pulling its downward weight on everything. I think studying the macro and fundamentals are important, but especially in bear markets because you can try and see which industries are holding up, which industries have a competitive advantage in this environment, and which companies are taking advantage of this in the biggest way.
Also paying attention to weekly charts is crucial. If you're only trading to hold for days, then it may not provide much use to you, but if the stock you bought isn't having such a great day or days, and is approaching a stop, looking at the weekly chart can give you a better perspective on whether or not to hold or exit.
Basically, risk management is a huge part of trading lol.
Hey, I appreciate your input. All in all, good points.
BTW I'm pretty much a noob myself By that you mean actively managing the position or initial entry?
If so, I'm not sure this is a set-it-and-forget-it environment with index futures at the moment as the market is largely range bound now. I'm not sure how swing traders typically approach their trading, but I'm sure many are still actively tracking/following the market even if they're not day trading.
If you really want to be a swing trader I think it would be wise to track a basket of various markets in order to have more opportunities as opposed to swing trading only one instrument.
Just my humble opinion of course.
In a bull market I think set-it-and-forget it is much easier as the trends are smoother and more persistent.