afaik, most prop firms focus on intraday price action. But the most legendary traders that I know of are swing/position traders, because you can capture much bigger moves than the average daily ranges (even with catalyst), and you're not getting chopped up by noisy algo driven intraday price action, or losing edge in commissions. In fact, a lot of these traders I've learned about were once day traders, but then went to swing trading. I don't want to just say swing trader is "easier" but it would appear that's what the evidence suggests. So why are such large % of prop firms developing day traders vs swing traders?
why do most prop firms focus on intraday trading?
- Thread starter spectastic
- Start date
Because a firm would need a LOT of capital to maintain the swing positions. They don't want to have to do that.
Also, there are no swing traders, no position traders, and no investors in the trading houses.
Day trader pays for using the trading desk, pays for the high-speed internet connection, and captures decent intraday movement.
Why day trading?
Because there are trading opportunities on most days.
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Prop firms are well capitalized. Some allow swing/position trading for proven traders.
IMO, the main reason is that with day trading it’s very easy to separate luck from skill/edge. With other types it is very difficult.
If prop firms were "well-capitalized", they would allow all traders to hold through the overnight margin check. Therefore, I call bollocks on your claim.
Why would they allow losing traders overnight exposure? They can’t easily control the risks. Traders that had been with them for a while can do that. Are you talking about Prop firms or the Funding Test firms like TopStep?
What is the difference between overnight movement and RTH movement? Nothing, except the margin requirements. Especially the difference between ETH moves vs. RTH moves during a major news release.