I have begun swing trading intraday the last three months using highly volatile intraday stocks (+-3% above/below the previous day's high/low) and trading the stock above/below the 15-min swing high/low. However, I have noticed a trend that taking trades where the swing high/low is within 10-15 cents of the whole dollar aren't always as successful. Furthermore, the swing trades where the swing high/low is within 20-30 cents of the whole $10 dollar mark (ie $30,$40, etc.) usually don't pan out either. Has anyone else experienced a similar phenomenon? Does anybody have an explanation?
Swing Trading intraday huh ? Is that a new style ? LOL What you're talking about is pure coincidence, and only 3 months worth of data is nothing. How many of these have u noticed per day ? Per week ? per month ? You need to work on the statistics more, rather than just say "stocks at $10.15 aren't as successful as stocks at $10.00. There is a known phenomenon that John Markman talks about where you shouldn't place your stops at $XX.00 . Rather, you should place your stops at $XX.95 b/c the Joe Schmo investor has a price target of $XX.00 and once it hits that price the sell off begins. To get away from that sell off, you place your stop at $XX.95 instead.
As a scalper, what you say makes perfect sense to me. If a stock is at 34.85, and has been running up and has some strength, it will most likely hit 35.00 unless there's no bull energy left whatsoever. Then, it may or may not break through. If it does, it may trade up to 35.10-12, then come back down through 35.00 and shake everyone out who bought above 35.00. It may also hold the 35.00 level as support, or break through the 35.00 level and not come aound again. Basically, you're more likely to get choppy price action as whole numbers very frequently act as minor support/resistance - because the numbers are psychologically significant, and because people put orders there. Joe Investor doesn't call his investor and say "purchase me 300 shares of HLT when it reaches $29.41" - he says "purchase me 300 shares of HLT at $30"
Levin89, I would suggest that your 'swing' time limit is too short. Be patient. Sit back. Relax. Let the Market come to you and then place and exit your trades. I hope this helps. Tom
thanks - I think I may be using the incorrect verbiage to describe my method as swing trading because apparently that has to deal with a longer time frame...however I have read a lot of articles pertaining to the strategy I employ known as swing trading so perhaps there is a disconnect on that. As well, I want to thank the poster about the price action around whole numbers. That's exactly what I was talking about. Thanks! Brian