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Why Day Trade instead of Swing Trade?
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Why Day Trade instead of Swing Trade?

  #21 (permalink)
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Sunil P View Post
thats one wife for you...asking for bank acct numbers,instead of calling 911 for you or looking for some aspirin or lidocaine or clot buster in the kitchen drawer.

@Sunil P

Please don't misunderstand... I was on the banks of the bayou... she was at home ... I had already called 911 before I called her...she got quite emotional actually... and with my empathetic Zen like nature ... the conversation went something like... "Don't you DARE fall apart on me! ... I don't have time to repeat this! ... "

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #22 (permalink)
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Everyone knows the potential rewards of day trading (my definition being, on the shortest practical time frame, 5 minute charts , trading the major support/resistance areas, tops/bottoms with fairly tight stops and fairly large positions. Maybe that equates to a max of 5 trades per day, depending on conditions.):

- multiple opportunities per day
- no overnight risk if you go to all cash at end of day, no gaps down if trading equities
- it's exciting

Here are the potential disadvantages to overcome:

- commissions/slippage
- missed opportunity of riding a big move (this is a big one to me)/taking profits far too early
- more fake out moves
- lots of small cuts losses
- taking a stop loss on a move that 'usually' comes back in your favor, eventually
- more screen time
- more stress
- the opposite on no overnight risk, no overnight reward

I do kind of a hybrid of day trading and longer term holds, where I scale in to weakness at apparent support using multiple time frames and scale out into strength. Right now anyway, I only trade from the long side and I tend to use indexed ETF's -- SPY, QQQ, IWM, IBB, depending on conditions -- so that I can scale in in smaller quantities than I could with the futures. I like IB for this approach since I can buy up to 200 shares for $1 commission.

When the major/panic selling happens, I try and sit on my hands more and wait until the dust settles. Then, I apply non-leveraged futures contracts (usually starting with 1 contract), willing to scale in on more weakness, up to a conservative total. Then, I try and ride this up for a bigger move.

I can't quantify this stuff but it's based on my feel for the markets and 12 years of experience.

I think that when you realize that only about 12% of the Hedge funds have beaten buy/hold on the S&P 500 this year (or most), you know how difficult any type of shorter term trading is, let alone day trading.

But, I also think that someone who is willing to put in a lot of screen time, use indexes, and only trade the more significant top and bottom areas of daily charts, using serious selectivity and rigid stop losses, can do well just day trading, assuming they can get the profit taking part right and let a few runners run.

"The Future Ain't what it used to be"
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  #23 (permalink)
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ThatManFromTexas View Post
@Sunil P

Please don't misunderstand... I was on the banks of the bayou... she was at home ... I had already called 911 before I called her...she got quite emotional actually... and with my empathetic Zen like nature ... the conversation went something like... "Don't you DARE fall apart on me! ... I don't have time to repeat this! ... "

AHH......makes sense....I hope you didnt develop CHF due to the MI....

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  #24 (permalink)
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ThatManFromTexas View Post
...
Then one Sunday morning I was riding my mountain bike along the bayou and had a heart attack. I pulled out my cell phone ... called 911 and then called my son's mother and told her where all the bank accounts and passwords were ...
...

If you are at higher risk for heart attack, it's a good idea to carry a couple aspirin tablets in your wallet or pocket. At the sign of a heart attack, which may include, shortness of breath, chest pain/pressure, arm pain, jaw pain, chew and swallow an aspirin tablet, and call 911. Chewing the aspirin gets it into your blood stream faster.

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  #25 (permalink)
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liquidcci's Avatar
 
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Day trade rather than swing trade

-No overnight risk.
-No constant following news etc... --Who cares what they do in Europe, at the Fed or company earnings (from a trading perspective at least-- do care about these things but not in regards to my trading)
More comfortable with leveraging.
End of day your done like punching the clock in a 9 to 5. Trading more like a 9 to 4 which is even better--- who cares what happens between 4:00 PM and 9:00 AM


I recently put on some swing trades in my retirement account and now remember why I would rather not be in swing trades. I find myself caring to much about what the Fed says, what they are doing in Europe etc as these things affect my positions. Complicates my life more than necessary.

Automated Day trading is "the life of Riley" I tell ya.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #26 (permalink)
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monpere View Post
If you are at higher risk for heart attack, it's a good idea to carry a couple aspirin tablets in your wallet or pocket. At the sign of a heart attack, which may include, shortness of breath, chest pain/pressure, arm pain, jaw pain, chew and swallow an aspirin tablet, and call 911. Chewing the aspirin gets it into your blood stream faster.


@monpere

At the time I didn't think I was at risk... I thought I was 10 foot tall and bullet proof .... I was wrong...

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #27 (permalink)
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I do both with no particular preference:
Day Trading - for paying the bills and putting food on the table
Swing Trading - for building wealth

Successful people will do what unsuccessful people won't or can't do!
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  #28 (permalink)
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Appreciate the answers so far.

My focus is to try and help the new traders who instantly start with day trading. Why would you do this? Here is what I experience over and over again:

- New traders overtrade - instant gratification works against them
- Leverage is the worst enemy
- New traders spend most of their time in an actual trade, and not waiting for a setup
- New traders discount swing trading, because it is too slow and not enough leverage
- Trading is extremely difficult, scalping is virtually impossible to be profitable as a retail trader

If you can't sleep at night due to your position, then you are trading too big and have unrealistic expectations of ROI. This is another very common goal. If I created another thread and asked people what percentage return they think is realistic on a month-by-month basis, I bet most of them would say something in excess of 25%.

Mike

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  #29 (permalink)
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Trading in today's markets is about the most difficult thing a person could choose to do for a living. It takes years and years of high level commitment. 100% of new traders who jump into the market with money will lose it. If you succeed at trading, it is likely that it will be after several years of simulated trading/training. Don't start trading with real money until you have a track record.

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  #30 (permalink)
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As has already been said by others, my main reasons are:

- No overnight risk. The ALSI (South African All Share Index) which I trade has no overnight session. So even if I had a stop in place, price may blow right through it overnight with no way to exit till the next day.

- Less exposure to fundamentals. If a big news announcement is coming out today, ill just stay out of the market around it.

With that said, my system gives me about 2 to 3 trades per day. Any more than 3 trades in a day is a lot and quite rare. So although it's day trading, a lot of the time is spent waiting for setups.

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