Swing Trading Day Trading Question

[cpatte7372]

Hello,

Whenever I ask for peoples views on swing and day trading I rarely get any feedback - I don't understand. Anyway, I'm going to ask again.

I would really like to hear your comments on day trading and swing trading. Over the past few months I have been concentrating on day trading, however lately I have been experimenting with swing trading and have found it to be more profitable. There are a number of reasons why I have found swing trading to be more profitable - commissions alone are enough to kill day traders - but I would really appreciate your comments.

Thanks in advance.

Carlton

[gspiker]

Carlton,

I think people do what their pyschological makeup tends to direct them to do.

BTW, in my book you can still daytrade and swing trade. You just close your position out at the end of the day and reenter if still valid the next AM. Using my terminology I think you are looking at scalping vs. swing trading.

I went about two years doing the daytrading things...both scalping a few points or fraction of a point here and there and swinging for multiple points. This is after I had been already trading succesfully for a long time, so trading wasn't new to me. I wanted to see if I really could make a LOT more money that way. The short answer was I didn't. And I was pretty good...I made money every week. I wasn't amazing - but I was fairly profitable. But I wasn't as profitable as I was when I swung a trade for a few days to weeks.

So a few years ago I switched back. I still swing trade the S&P emni intraday someties, just for fun, and I do make trades that last months. But mostly I'm in it for the medium term. Some people can't stand the idea of holding over night. Some people really just like to be really active and view monitoring trades as too passive. Some people don't like doing the research it takes to be a swing trader...it is even more important to do your homework. I can understand all of this...but that isn't me. My guess is that those people who feel that way make more money scalping/swing trading intraday than they would swing trading for longer.

So to answer your question - I think you will find one style of trading that fits you. Hopefully you can find it before taking many real losses...and the thing is paper trading will not help you a lot here. When you pull the trigger for real it just feels different. Until you do it enough...then a lot of the emotion does go out of it...but that takes a while. At least it did for me.

Garth

[cpatte7372]

Garth,

That is exactly the kind of feedback I have been wanting to hear. You have managed to comment on a number of points I wanted to cover - even thoughs I hadn't thought of.

I have yet to put on a single trade, however, my research concurs with your experience that swing trading is far more profitable than day trading - even when you take out the commisions from the equation.

I also understand that its primarily about personal preference but as I said I really wanted to hear peoples view on which method resulted in the most profits.

So, thanks again mate.

Cheers

Carlton

[cpatte7372]

Also,

Garth, I agree with you when you say 'paper trading won't help a lot', however can you explain in a little more detail?

Cheers

Carlton

[KingCAMBO]

C,
Check out this book: The Taylor Trading Technique - ISBN# 0-934380-24-4

That method can be daytraded -OR- swing traded on a 3 day cycle. I have had very good results with it.
best,
KingCAMBO

[DuaneG]

Hi Carlton,

A significant portion of the trading game deals with psychology, both that of the trader and that of the rest of the investing world. If you’re interested in the psychological portion of the trading business, I would definitely recommend "Trading in the Zone" by Mark Douglas. This is one of the best trading books that I have come across that did not directly address technical analysis.

[cpatte7372]

Duane,

I have that book, and I agree it addresses the psychological issues when trading - very good book indeed.

I'm checking the reviews for the book KingCAMBO recommended at the moment.

Carlton

[gspiker]

Hi Carlton,

First off please note...

I have yet to put on a single trade, however, my research concurs with your experience that swing trading is far more profitable than day trading - even when you take out the commisions from the equation.

I really only said that for ME, using my indicators and style, that this is true. I don't think I can make a blanket statement about this, as I am far from knowing everyone's methods and state of mind.

There are many issue around paper trading vs real trading. Let's take the most common one - there is no risk with paper trading. Emotionally it is like a game. Sure I want to win, but there is no skin in the game. Ever see a good (pick your favorite sport) player who does great in friendly games but fold during a real match? It happens - stress can be a killer on performance.

But then there is the matter of slippage (will I really get filled at the same prices as my paper trades, or is the market really fast when I go to trade...so that the extra time to post the trade to an exchange is enough that the price has moved), and of having dealing with the odd occurences of RT trading. Your ISP goes down, your broker goes down, you system crashes and reboots in the middle of a trade etc...

Real trading is just very different from paper trading. There are no do overs, and you are playing for real money.

G

[KingCAMBO]

The other fallacy of paper trading Carlton is....fear and greed never enter the equation. These are real factors that have to be dealt with.

I am all for paper trading to smooth out a methodology, but Garth brings up some good points here. You never know how your going to really react and for that matter even "take action" until there is hard cash on the line.

Something to think about.
KC

[DuaneG]

Hi Carlton,

Here is another resource that you may find useful.

[cpatte7372]

Duane,

Thats an excellent site.

Cheers

Carlton

[cpatte7372]

KingCAMBO,

Thanks for the thoughtful comments on fear and greed. I guess fear and greed will always be with us but I suppose the key is being able to recognise it and control it.

Cheers

Carlton