Well, get back to the original topic, I would like to share my edge in my “profitable” hustle, swing trading stocks:

And it is actually quite simple.
When in a obvious weekly/daily uptrend, I seek to fill my portfolio 80% with picking up oversold stocks (RSI, RMO, patterns, volumes study). 20% trading momentum stocks on a shorter time frame.

In a obvious downtrend, I try to fill my portfolio 50% with shorting overbought stocks using indicators. 30% cash. 20% trading momentum stocks.


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LastDino 

This is going to sound weird but my observation is stocks are usually way more problematic to trade compared to index futures, especially if they have low volume.

Yes, but low volumes, in my experience, are not as problematic in swing trading as opposed to day trading. Although you do see a surge in volumes strongly correlated to rising price, you do need some kind of catalyst for that to happen. Patience pays off in swing trade (especially in a uptrend).


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yolo778778 

Well, get back to the original topic, I would like to share my edge in my “profitable” hustle, swing trading stocks: And it is actually quite simple. When in a obvious weekly/daily uptrend, I seek to fill my portfolio 80% with picking up oversold stocks (RSI, RMO, patterns, volumes study). 20% trading momentum stocks on a shorter time frame. In a obvious downtrend, I try to fill my portfolio 50% with shorting overbought stocks using indicators. 30% cash. 20% trading momentum stocks.

An advantage to futures even with swinging is the 60% long term /40% short term tax rate which will save significant amount vs 100% short term capital gains swinging equities.

You should be able to do similar on a shorter/quicker timeframe with enough practice. Replace your longer timeframes with equivalent ratio of shorter ones like 1d to 1h or 1h to 10min which is like 6 to 1 depending on what you consider trading hours. It means you have to watch the chart more obviously and get in and out much quicker that alone will be more emotionally difficult than swing especially so if you have less confidence in it.

Personally I like to look at a chart no more than once an hour or so. I don't like alerts because I want to be in control of when I feel like it mentally but I do use custom columns on the few things I trade that can quickly show me risk and if I need to look longer than a quick glance. I think of that like surfing and checking the waves to see if conditions are good and if not I do something else and come back later. If surfs up I watch for a big set and ride one.

three86 

An advantage to futures even with swinging is the 60% long term /40% short term tax rate which will save significant amount vs 100% short term capital gains swinging equities. You should be able to do similar on a shorter/quicker timeframe with enough practice. Replace your longer timeframes with equivalent ratio of shorter ones like 1d to 1h or 1h to 10min which is like 6 to 1 depending on what you consider trading hours. It means you have to watch the chart more obviously and get in and out much quicker that alone will be more emotionally difficult than swing especially so if you have less confidence in it. Personally I like to look at a chart no more than once an hour or so. I don't like alerts because I want to be in control of when I feel like it mentally but I do use custom columns on the few things I trade that can quickly show me risk and if I need to look longer than a quick glance. I think of that like surfing and checking the waves to see if conditions are good and if not I do something else and come back later. If surfs up I watch for a big set and ride one.

It’s good advise. I guess I would have to take on more risks than I can emotionally handle if I want to continue.

This might make you envious, I’m not from US. My country has no capital gain tax, nor any short term equities gain tax. Although, I managed to make only a bit profits here and there, I am sure a lot of you would have taken full advantage of it.


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programming, volume, and patience.

I'm a 5 month old trader and I think I'm getting there. I'm struggling with my mind at this point. I'm usually a scalper (not always!) and the fast thinking aspect of it is my biggest challenge. Here are the ingredients that will form my edge soon (I hope).

1 Identification of Repetitive Patterns

The moment when the trader realizes that the market is not random and start to catch high probability trades.

2 Mindset

The patience to look at the screen and wait (for the high probability trade).

3 Plan and Discipline

Plan an exceptional strategy and develop discipline to apply it in the right context.

4 Jouney

Write everything!
What the winner of the day/week did differently from the loser of the day/week?

5 Experience

Screen time! That's why I use 1-3 minute charts and trade every day all day long.

6 Flexibility

You can have one plan and follow it when the market met the conditions or you can have several plans and use them according to the different market conditions. I prefer the second one.

There are good days to hold the trade all day long, there are good days for scalp. There are days for price reversal strategies and days for breakouts strategies. There are days for tight stops and days when it doesn't really matter. There are days when I sacrifice risk-reward for win-rate and days when I sacrifice win-rate for risk-reward.

7 Management

Knowing how to get out of a bad trade by losing as minimum as possible and knowing how to deal with a winning trade.

Screen time will help with that.

8 Non-Religious Approach

Let's open your minds and think out of the box.

I have to go with "Context" being number one - especially relative to the time-frame you are trading and it might take the longest to understand.

These are my personal beliefs and opinions - they are not right and you are not wrong if your beliefs are different from mine. In trading it doesn't matter what you believe as long as it works for you. A Magic 8 ball would be ok if it provided an edge.

Also there are times when as a day trader the higher time frame targets are within range and you can target where intermediate time frame traders are caught. Other times, you are inside the previous days range testing both sides - outside edges so you need to have a different approach - at least from targets/rotational potential & trade mgmt.

Assuming most of us are day traders, imho you need different trade plans relative to the current context of the market and the context can/will change intraday.

When the market trends on an interday basis and you have open high probability targets you can make most of your day - trading a trending plan. When the market shifts to balance or range-bound rotational, the same approach you used for the trending move will cause losses since the rotations will be shorter and your risk/reward will not be as favorable and the market might give you a scale then your runner comes back and you scratch or get peanuts for your risk. The set up/trigger would be the same potentially (assuming your plan uses that for the context) but the target needs to be calibrated to the context - assuming you use targets vs trailing stops. Often the transition from trending to balance will not reveal itself until you have either taken a loss or have observed the rotations compressing and the market rotating around a high volume area - balance. Additionally, the market interday can move between contexts multiple times and, at least for me, there is no way to know in advance, it is going to change until it does.

The market tends to move from balance - acceptance of an area where it checks the outside edges and transverses a range, etc until it leaves that balance and traders who are on the wrong side provide the fuel for that energy to be released until the market tests a former balance area to check those prices. Is it fair priced or too high or too low? Then the market will check elsewhere or return to where it was. It does this on all time-frames - it is the same process - that is where you can see the context.

One of the things that really helped me with context was market profiles and auction market theory. You need to understand that the market imo is not indicators which are backwards looking but it is the changing behavior revealed in the moment. This is more important to daytraders than swing traders but as a former swing trader I prefer sleeping good and having a fresh start every day.

Sometimes the behavior is relative to the time of day. Other times, it is random or responds to external events, etc. The consistent thing about the markets is that they are inconsistent - there is a large random component which is why any edge needs to be consistently executed and seen as a measurable probability. Your trading needs to have an anchor - you should not bring more randomness into the market - you should not be random - the market has enough randomness. $ in vs $ out. Losses are a cost of production - no different from factory overhead to produce widgets. The market is random as far as the outcome of any specific trade - the execution cannot be random if you want to actually have a measurable edge.

Scalping, imho costs too much and the R/ factor just doesn't work - at least for me. So how do you describe a scalp - a 4 pt move in ES, 3 pts? 1.5 pts. Also are you trading for action and stimulus or profits? I will take short term trades but for points - not ticks.

When we think about an edge, I agree with those who suggest you need to define your sandbox (sandboxes) and focus on playing in that arena. Who are you trading against? Where are you in the market's financial food-chain? We certainly aren't going to beat the Algo's. If you've been at this long enough and have made contributions to the traders who were on the other side of your trades then potentially consider what you were doing to be on the wrong side. Where do stops pile up.. what happens to traders who always execute at the mid/vwap - even when the market is balanced? They get taken out. There are many ways to execute/trigger trades. Everyone focuses on setups but that is not the primary obstacle in my opinion.

It is about context, executing consistently your plan which is designed for the current context. Being separate from the need to be right. How do you define success? Simply it is executing a successful plan as accurately as possible. For me, even a losing day is a winner and just the cost of production as long as I execute my plan. I look at my trades and ask myself did I do what I was supposed to do? If yes, I know that the days outcome was part of the random distribution of my edges. This why taking the same set up structure might work the first time and later that day at a different location it shows up - you execute and take a loss - randomness of the market.

Aside from context - I would say the next important area, assuming you actually have a quantifiable positive edge/plan, and potentially the number 1 reason traders fail are the psychological obstacles to consistent execution.

We all go down the same road more or less with bar charts, indicators, systems, etc. Most have the need to "predict" the market and be right. Trading is not about that - in fact if that is what is in your mind then you need to get your psychology aligned with the market. What are your thoughts while you are trading - your self talk? That will reveal what needs to be worked on if you are going to have a chance to succeed.

You really need to find something that "speaks" to you. This is why you can't just read a book, take a seminar, join a Chat room or educator and expect to be able to replicate and execute their success - assuming they are successful. I have not seen that work consistently. The solution needs to come from within. You can get ideas, of course, but thinking you will get a market ATM out of it is naive at best.

Trading in many ways is like dancing with the market. You need to find what fits your personality, be able to experience the market on a visceral level, find a rhythm you can align yourself with. There are times when you are aligned and there are times it makes no sense. That imo is part of the randomness. Think about it.. you might believe the market might take out a weekly high but as a day trader you might be short in the morning as weak longs get washed out before the market eventually goes higher - if it even does. As a trader, you would at least know that the market tends to take the weak hands or early buyers out before going higher - then again it might not - randomness. But you would be aware of the possibility and if a trade shows up - long/short or upside down you take it - as long as it fits your plan.

There is no easy answer to any of this. It really is an individual journey and the market is unique at every moment since it reflects the activity of the participants at that very moment.

I hope this has made some sense and I hope I do not offend anyone. My opinions are my own and they might apply to some of you and I'm sure there are many that it doesn't. That is what makes trading what it is - an individual journey of self discovery. You will never truly learn who you really are until you trade.

Don't seek the Holy Grail.
There is no secret trading formula, other than solid risk management. So stop looking!

Attention to profit is a sign of immaturity, while attention to loss is a sign of experience.

Massive l 

programming, volume, and patience.

Good to hear from you! Hope all is well!

@yolo778778
I'd say Orderflow IS pretty close to the holy grail. You can see whats going and everything you said. You just need a good Mentor that teaches you how to read the footprints/orderflow and interpret it right.
After that it takes lots of practise and time. It feels a bit like starting over with learning to trade if you come from equities. But its worth it!