Scalp some / Swing some

Discussion in 'Index Futures' started by Swan Noir, Oct 23, 2009.

  1. Do traders scalp a portion of their position (say half) and swing the balance for a reason other than morale? I understand the frustration of hanging on to a marginally profitable trade that, if closed out, would have been a nice enough scalp yet turned into a scratch or even a few ticks worse.

    It seems to me that they are two distinct trades and there is not a mathematical or even logical reason that the many (most) intra-day trades are closed out this way.

    BTW ... I am not suggesting morale is not important or that traders who are making money should change their style. I am new enough and risk averse enough to trade a trade a single NQ contract and obviously can't bifurcate the trade.
  2. A day trader who lacks discipline usually becomes a swinger, only to end up as a very frustrated investor. All that could have been avoidable had he only simply followed one important tenet that defines day trading: close out all trades at the end of the day, regardless of what the outcome might be.

    Certainly there's nothing wrong with being a swinger or an investor. But, in my humble opinion, a day trader and a swinger have completely different mindsets. They think differently. For instance, while the swinger might view intraday whipsaws as mere noise, no matter how deep and wide the ranges might be, day traders see them as golden opportunities. By contrast, while swingers have no qualm about taking losers home, day traders see that as one of the cardinal sins of trading (not to mention that you tend to sleep better at night without a position).

    That's not to say that one is better than the other. Both have pros and cons. But it's my opinion that you're better served if you stick to one or the other, and not try to become both at the same time.
  3. Saliva ...

    I should have been clearer in my post. I was talking only about trades closed out by EOD ... not taking any trades to bed.

    I used the term "swing" to characterize trades that were designed to catch the intraday swings that are not what most think of as scalps.

    I certainly agree that by and large one must decide if they are a day trader or willing to sleep on them. I think for some day traders -- not me -- keeping winners overnight and then managing them off the daily charts may makes sense.

    Thanks for your thoughtful reply.
  4. Scalp some and let the rest ride is mainly done for psych reasons. Attempting to play long ball consistently is very difficult because of all the give-backs. I think the most profitable way to trade is actually to add to all winners, however most lack the fortitude. Google phantom of the pits for a desciption of the quickest way to compound trading capital, fitting it should be the most difficult.
  5. One of the KEY edges of trading: Emotion Free. Following the two rules by Phantom and you will get there.
  6. I have read seven chapters of POP and am on my way to bed. Thanks for the recomendation and the link.

    Before I sleep I have one question. I am day trading a single NQ contract because i like the $5 tick and want to learn with lower exposure. Am I correct in my read that he is OK with a day trader not adding on? Obviously I can never cut my position only close out the single contract. But my plan calls for limiting my exposure while I am "green".