Daytrading leads to Inevitable Failure? Is Swing Trading the only Viable Path?

Aren't they long term swing traders? For the most part far from day traders.

 

Sounds to me like you're just in a bad slump.

If you really believe this (you don't though, because it's self-evidently untrue) you should quit now. Iron discipline is shown by people in all walks of life. Don't bother saying 'I was talking about trading' because the same discipline that is required in trading is required to lose wight, stop smoking, etc. That's why the majority can't achieve these goals.

All of these are psychological issues, they don't have anything to do with daytrading per se.

Is swing trading better? It is for some people, who don't have the psychological profile necessary for daytrading. It's pretty obvious that for competent practitioners, daytrading is the most consistent, lowest-risk way of trading. If you start swing trading, you could well be back here when your stock gets halted after close, or whatever.

 

Well you got it all figured out. Daytrading will not work for you. For me its been working for 10 years now and Barney, Obama and the boys consider me rich.

 

"Exactly if not for those massive losses, I'd be up 75k for the year"

This is an extremely lame excuse. ........ You know, if not for the fact that I'm 5"10, 165 lbs I could play linebacker in the NFL.

If you have a style that makes $600 a day and takes 25k losses once a month, well then you need a new system.

Discipline is NOT a myth. If you really believe that, do yourself a favor and close your account at once.

You say you make money trading the trend nearly every day, then fade a trend and average down. How about you stop trend fighting and averaging down?

You obviously have some skill but your posts are riddled with weak excuses. Stop being mentally lazy and execute your plan.

 

1 Limiting profits. The very nature of daytrading means that you are cutting your profit potential short by not holding for more than a day or a few hours. There are are moves that go on for days, weeks, and months with only the slightest pullbacks. These are the moves that make your year.

<b>Possibly true but holding overnight exposes traders to overnight risk and may also result in giving profits back.</b>

2 Daytrading is a very addicting and can become compulsive. The more frequently you trade the more addicted you become to the action. Also the more frequently you trade the more compulsive your actions become.

<b>Somewhat true. If you day trade futures you're basically screwed because it's like trying crack. Once you try it you're hooked for life </b>

3 Irrational fear of holding overnight. Many daytraders think that daytrading is actually less risky than holding overnights because they think they have too much "headline" or "overnight" risk even when they have a position that is deep ITM.

<b>This is the absolute truth. Overnight risk is much higher than intra-day risk. Even the exchanges/brokers know this. Why is overnight margin for the ES 6188 while many brokers offer 500 margins?</b>

4 Daytraders often use excess leverage. Futures and options offer so much leverage that an intraday move can blow u out.

<b>You can either do it or you can't</b>

5 Daytraders don't often diversify. Its really hard to intraday trade a portfolio, so most guys just concentrate positions in one or two instruments.

<b>Diversification is for investors. Stops and avoiding overnight risk is for traders. You are comparing apples with oranges</b>

6 Great profit potential also means greater loss potential. Sure you can make 2x the daily range daytrading but more often you can lose 2x the daily range.

<b>True</b>

7 Daytrading is ultimately a non scalable skill.

<b>Not true. It is highly scalable. Day trading can be a highly lucrative career but as you mentioned you can quickly blow out. You can either do it or you can't and because you struggled with day trading doesn't mean everyone does. Some are just better than others. It's important for a trader to find what he or she is best at and spend as much time as possible in that arena. I am not good at trading options so I don't trade options but I can trade like the wind in the futures markets so that's where I operate. Do what works.</b>

 

I actually average a 2.5k gain on my winners its just that every once in a while I have a massive loss. My average loss for the past 240 sessions is 4.5k. Anyway being flat for 3 months just feels like a blow up and I feel I gotta try something different.

 

I day trade and swing, why not do both? The difference is largely the time frame. There’s no doubt you make bigger bucks swinging, but it takes longer for a good setup to develop. And while I’ll make as much in 3 days swinging as I’ll make in 3 weeks day trading, at least the day trading pays the bills and keeps you busy until ‘all the stars align’ for a good setup.

But first understand that your trading mentality will be fundamentally different. I trade momentum intra-day but counter-trend swings over days/weeks. Of course there are many different approaches, but having your funds locked up and vulnerable over a longer period can be more challenging psychologically. Just be prepared for that.

Good Luck!

 

You have perverted the best reason for success.

If daytrading is limiting your profits and it is, you can also use time on trade more importantly to limit your risk which will limit your losses.

Daytrading can be a form of investing where you hold your postion for a few minutes a day instead of 24 hours a day.

I trade the same couple of stocks day after day. And if the trend is up, just look to buy the intraday low. Even if you do not find the absolute intraday low, the intraday low for the first two hours of trading can make a profitable day. If the trend is down sell that intraday high. It may not be quite that simplistic but it is a starting point for one to build a profitable system. It is the same strategy of buying the dips that made investors so much money in the great bull market of the 90's, but simply doing in a much less than a day what they did in months and years.

There are an awful lot of ways to make money trading. I am not smart enough to appreciate even half the ways to be profitable trading.

But I do understand, that I like to daytrade because it allows you to manage risk by minimizing time on trade.

I do not look to hold stock for a day or for even hours, I make my living taking positions for a few minutes. If I hold on longer for hours I have scaled out and locked in some profit. And sideways trades are my best friends because I will probably get back in, going the same direction with the same size with same stock, but it gives me a chance at a more profitable entry point. You are probably in the right neighborhood, but no one finds the right address on the first try every time. Sometimes, you have to ring a couple of doorbells to find the right address.

 

Btw, nobody on the list is a daytrader. With this post you have answered your own question. You need discipline in any timeframe and even then if you become reckless you can lose your ass. But that's what the trading game is; like it or hate it.

 

Er... just stop it? Don't average down until you're 25k in the hole?

There are many ways to deal with the problem you're describing - like setting a daily loss limit at which point you stop trading, or selecting a strategy that doesn't require you to average down and over-leverage yourself.