Me thinks deaddog is trading in fear. Fear of an unknown - ie; losing control due to market is closed. Fear of holding too long and losing focus or just plain fear of holding. Fear that there is higher probability of loss, eg more black swans than white swans. Fear that you will have a restless night in bed from anxiety. Fear that you are locked into a position which mentally you perceive will be a loser and getting hammered while if you were daytrading you can switch more rapidly as you are already in cash. So, in order to alleviate these fears, it is easier in your mind to be twitchy for a few hours a day rather than be constantly twitchy 24 hours a day. Right?
How I trade or what motivates me has nothing to do with the risk involved. I'm saying that there is less risk in day trading. If you can tell me to the dollar what your account balance will be when the market opens on Monday I'll agree that there is no risk. A day trader can tell you that. Therefore the day trader has less risk. Hell I haven't day traded in years, I'm a swing trader. I just disagree that day trading is more risky than swing or position or buy and hold. Your flat every night. Where is the risk?
What is LIKELY to happen next? A gun is held to your head by the kidnappers. They speak: “You got 5 minutes. Choose. Should we go long on the stock or should we short? If you are right you will live. If you are wrong you will die. Now choose!” “You have to be proven right within two hours of your choice.” How many of you (if you are the person kidnapped) on this thread will say short? How many will say go long? For either answer explain WHY you would choose what you choose. You hear the revolver cock as the hammer is pulled back......three drops of sweat fall off your forehead....you ask for a glass of water. It is provided. That doesn’t stop the shaking inside. You life depends on you picking the correct direction. This is all you are given. This chart pattern. That's right ...a chart pattern. Nothing else. No mathematical stats... No indicators. No volume. The countdown continues 60 seconds left.....you look hard at the chart you reason....you reason for long...you reason for short....you open your mouth wide and you shout to your kidnappers .....go............................to make money within two hours.
DD you are quite correct. You are only at risk when you are “in the market” Grab them profits and get out. Then jump back in and grab some more.
The additional risk in daytrading is several fold. One of them is constant decision making. Constant analysis. Constant activity. Constant stress (don't tell me there isnt additional stress from making more decisions faster). Constant additional errors. Constantly cursing quietly to yourself when mkt gaps up and you're not in. As for black swans in overnight holding, that is overblown to hell. It's pure bs!
The question should be restructured IMO, how can we use price action as a precursor to trend continuation or trend reversal? The rest is based on risk management.
I agree that day trading is tougher than swing trading for all of the above reasons. That is why I swing trade. For sure I agree that it is more stressful. All of the above can be controlled. That's what makes a successful trader, the ability and the discipline to make quick decisions. When the market is open, everyone has the same risk. We can all react to what the market does. The only thing we can control is when we buy and sell. When news is released we have the opportunity to make an immediate decision. When the market is closed and news is released we have to wait for the market to open before we can react. It's a risk we take. Some traders won't hold into an earnings announcement. Some traders won't hold into a Fed announcement. Some traders won't hold GME overnight. If you ask them why it's likely they'll answer too much risk. As for the black swans overnight, they may be overblown, but they are a risk. A risk the day trader doesn't have. Trading is not risk free. Not having your capital in the market is.
Since you word it that way YES. Sometimes the word anticipate softens the truth that we are all trying to predict price or we wouldn't take a position. We wouldn’t decide long or short..ROFLMAO. It is amazing but folks get bent out of shape over semantics. Definition: “Just like a hypothesis, a prediction is a type of guess. However, a prediction is an estimation made from observations. For example, you observe that every time the wind blows, flower petals fall from the tree. Therefore, you could predict that if the wind blows, petals will fall from the tree.” Apply to trading:It is my estimation that this trend will likely continue, with at least a second leg after this BO, because THAT is what I have seen from my observation of price behavior in the past. Namely, a strong BO, like the present one, one that has only a 1 or 2 bar PB, price, most of the time, resumes the trend with at least a second leg. Those observations have indicated that there is a 70% chance there will be another leg in the direction of the previous trend before the PB.” “Therefore, I predict a second leg is likely forth coming and I will take position but place a SL should my anticipation/prediction of second leg trend continuation not pan out.” Since nothing is 100% certain in life (including that any of us will be alive to read this post) I predict based upon probabilities. Those probabilities are based upon previous observations. And I take a position. To say I am not predicting but just taking a position out of “thin air” is ludicrous. If a body is gonna trade he best make haste and learn to predict based upon previous observations ..assign probabilities...or stay out of the game otherwise, he is playing, at best a 50/50, guessing game with NO basis for the guess. Just a wild shot in the dark. If one believes in high probability trades then one is attempting prediction. Yes, price action can thus be helpful in predicting future moves. Otherwise, don’t look at a chart. Don’t look at RAW data points and THEIR patterns. Don’t look at indicators. ALL these are just tools to help “predict” likely price moves so traders can take a position when they see an edge. We are deceiving ourselves if we deny we are trying to predict. The trading game IS ALL ABOUT trying to predict ...not just taking a position for “the hell of it.” I predict some disagreements over this posts and terminology. Or I predict silence. Total agreement would be an unlikely response but possible ROFLMAO