Hi, I've been learning to daytrade/swingtrade for some years, and recently turned fulltime. But everytime I'm loaded with "good" swing positions, I got washed out by market downturns such as the one yesterday. Reminds me of year 2000 when I lost a bunch and stopped trading to concentrate on job. How do you protect your swing profits? Anyone else in my situation? Thanks.
By definition, a swing trader buys the downdrafts and sells the upturns -- you should be out selling on strength with no patience for sitting through pullbacks. As for trailing stops, I find them specifically useful only during extreme price moves -- parabolic, blow-off volume situations. They are basically an admission that you are ready to exit the position; for me, I usually find I do better just exiting at market whenever I find myself thinking about trailing up my stops, but that's just me.
Yeah, makes sense. I was actually leaning towards a mental trailing stop. Just know where you'd like to get out to protect gains. That is how I do it, but good advice, as that is how I do it, but sometimes get a stock that goes heavily in my favor and will mentally trail the stock, i see nothing wrong with that... as long as it is a liquid stock that is, if not, then.... I can't help you. EDIT: I'm not a swing-trader though, so... my suggestions shouldn't be taken as seriously as a swing-trader.
Thanks for the suggestions, I guess I should stay out today. Trailing stop is a good reminder that I should lower my profit target/expectation during this period.
I think you should ask yourself a couple of key questions before you begin full time trading again. Are you willing to adapt to an ever changing market? Obviously it was not a "GOOD" swing position because you lost money. How are you objectively judging your trades? You say you have been swing/day trading for years and just started trading full time. Do you have a trading plan? If you are trading full time have you thought about trading more actively during the day? For my trading style I need to have over 50% winners to be profitable. To accomplish this on a daily basis I make between 20-50 trades a day. The more attempts the market allows me to have the better chance I have of batting for average.
============== Bstay; Prefer to Day trade and swingtrade separate acounts. Dont merge the 2 ; or at least till you get it. SPY, ES, DIA,YM had a fairly typical sell /correction in buy/ uptrend; sounds like you were daytrading, without written plan. 50 period moving average helps with plan. On mountain charts, daytrading AND swingtrading; like to buy after the valley, sell after some peaks, premature selling , dont usually care much for it. Sounds like mainly you need a well researched plan; the plans of the diligent.-Solomon, trader king