Does anyone *make a living* swing trading or long term investing?

Discussion in 'Trading' started by IronFist, Feb 14, 2007.

  1. You hear about "that guy day trades for a living" or "yeah, that guy's a day trader" and it's their only job.

    Are other types of trading profitable enough to *live* off of?

    I've heard that total profits are potentially higher with swing trading than day trading, and then I've heard the opposite.

    So could you swing trade and live off of it assuming a realistic starting capital? I don't mean some guy with $1M making $10k a month swing trading. I mean some guy with $50-100k making $5-10k a month.

    Is it realistically doable? Could you have $100k (with margin) and make 10% per month or something? Or is that even more of a pipedream than daytrading succesfully?
  2. Yeah it's doable, I know one woman who made a decent living focusing on breakouts and swing trading plays while having some position trades on the side.

    In my opinion, 50-100k in a nonmargin account would be too difficult to make yearly expenses. Really you want to increase capital to make it easy on yourself... so you should be trying to withdraw funds from your account as little as possible. Margin is good here. You would want to have at least 150-200k, assuming an average share price of 40... you could be in a max of 3 plays at once with lots of a thousand.

    The reason you don't hear about people making a living swing trading is because compared to day trading, swing trading and position trading setups take a lot less time. You could potentially spend at most an hour a day after market researching plays and entering orders. For this reason, it's not mutually exclusive to have a day job and just swing trade on the side. That would not only let you build up capital faster, but you would have discipline since you couldn't check the ticker during the day.

    So yeah, it's possible but if you're swing trading I'd imagine you'd have time for other things as well, such as a day job.
  3. Joab


    If you have good skills 10% per month on accounts up to 1 million are possible.
  4. Many do, but finding the statistics is difficult. $100k is far too small of an amount to comfortably swing trade for a living off of. I'd say $500k min if you're single/low cost of living, though $1M is more often quoted as the appropriate amount (especially if you have a family).

    Swing trading, by its very nature, is a strategy that rewards patience. Thus, one of the strongest aspects that has made me a profitable swing trader over the years has been my full-time work, as I tend to take profits far too quickly if I only have the market to occupy my time. If you're swing trading the daily/weekly chart, you certainly don't need to be a "tick hound" in front of the screen all day.

    In my experience, swing setups tend to have a stronger probability of following technical patterns than the intraday time period. A great example is today's ascending triangle breakout of the euro, about as textbook as it gets.
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  5. The key here is "possible". Yes, such results are possible, but it always depends on market conditions. It's hard to squeeze out $10,000 out of your $100k account every month like clockwork. Maybe one month you will be -$20k, next month +$40k, then $0k the following month.

    That makes it hard for many to cover constant living expenses with just trading profits.

    On a different note: In order to make 10% a month you will have to risk getting your account wiped out on a daily basis.
  6. Joab


    This would be true only if you were a machine and had no flexibility.

    A great trader changes gears with the markets.

    If you don't have these skills that you shouldn't be trading in the first place imho.
  7. Yes! Provided you can "use" a $million or more...then you're only making 10-20% on the "used" capital (even though we don't really think about "ROI" - we know that the money is just a tool..traders of any time frame make money by engaging in the right strategies.

    I agree with KGB.


  8. nassau


    I am not sure of your definition of swing and day trading but I can tell you that what you are looking to do is attainable provided you implement a strict risk management policy of your capital.
    I have several traders that trade with less and make the half percent a day you are looking to obtain.
    100capital allows you to 400bp and 2/1 over night.
    we also write calls and puts inside what we believe to be the stocks current trading range and trade the stock within those boundaries.
    initially the traders are trading approx 100-120bp and generate 300-500 daily with 50k-200bp 500-800
    as others have posted patience is key and remember to leave some money on the table.
    as it is almost impossible to guess the tops and bottoms I usually suggest the traders scale into their positions.
    most traders here are flat end of day.

  9. A swing trade means anything more than a day trade, and less than a month hold. Patience is not a critical factor. IF day traders can make it off 50k..then a swing trader should be able to do MUCH better, assuming that he knows what he's doing. If you have a family, then both of them should be working...unless that trader can pull in some coin, WHY would you rely on only one income?!..especially from something as risky as trading.

  10. DHOHHI


    I've done it for almost 11 years with my beginning of year capital in the $100-110K range. I don't pull out anything at all during the year and have living expenses covered from a bank account. I both day trade and swing trade with swing trading making up about 85% of my profits.

    This year I started with $245K, mainly due to last year being so profitable and believing I could do better with that capital available to trade than stashing it in a CD or another conservative investment.

    If you start with just $50K, and are lacking in trading experience, I think it'll be an uphill battle. And if you're just starting out you likely need to set your goals quite a bit lower IMO. Too many people blow out by going for home runs early on and not taking losses which are all part of the game.
    #10     Feb 14, 2007