Swingtrading Versus Daytrading Debate

Discussion in 'Trading' started by candletrader, Jul 15, 2002.

  1. Bottom line is, is what you are doing making you money?

    My answer (for me) is YES.

    Who cares that I don't carry winners overnight. My average win size to average loss size has grown over the past couple of months to greater than two to one, whilst maintainig greater than 50% accuracy. It's a slight edge, yes, but one I exploit by making many trades.

    The adage "let your winners run" is applied with respect to the timeframe traded. Your exit methodology will determine the right time to get out. Pretty simple.
    #31     Jul 15, 2002
  2. trader99


    Yep. This point about commissions I must agree. Floor traders, by definition, are mostly scalpers. And eventually will give away to pure electronic exchanges like what happened with futures in Europe. And no reason why equities wouldn't follow the same way. But b/c floor traders don't pay commissions, scalping can be reasonable enterprise and even a lucrative endeavor.

    But when you are not on the floor, commissions become a huge part of your expenses. Since I'm not a pure scalper, but I've scalp a little here and there and even when I'm not doing microscalp but more slighlty bigger move(20-30 cents), commissions takes up a large percentage of total profit. And I can't even begin to imagine how the % of profits eaten by commissions for those who scalp for 3-5cents move. Probably approach 70-80%?

    This would be a good exerice. Do the following calculations: Take commissions/gross profit and figure out that stats. I try to trade for 20-30cents move and not very heavy trading and even then it that ratio (expense/gross profit) approaches 30-40% of gross profits! dang.

    So, controlling cost is one way to increase profits. But as others have mentioned here, as long as you can make $$ consistently then maybe that's all that's enough. But it's still nice to try to analyze your trades and see the good and bad points about it.

    #32     Jul 15, 2002
  3. I day trade more[+slow] during bear trends. Plan it that way.

    Swingtrade more during uptrends. Seems like NASDAQ stocks + TYC [etc...] trend longer during during uptrends.

    Win ,,lose or sideways trend, daytading is more stressful to me.
    Walk 30 minutes plus helps.{perday}


    ''He that showeth discretion {wisdom} concerning a matter shall find good''- mind of Solomon:cool:
    #33     Jul 16, 2002
  4. the risk averse side of me prefers daytrading, but i have developed a strong focus on swingtrading anyway, for two key reasons:

    1) Laziness / freetime.

    I don't have to work nearly as hard for my money as daytraders do, and I have significantly lower stress levels and concentration requirements.

    2) Long run size cap.

    You can only go so far with scalping before size deterioration kills your strategy. I'd rather make 40% on three million than 400% on 100K.

    Also, the fear of overnight blowups is highly overplayed. If you lose ten times your planned risk in a nightmare scenario but you only had one percent planned risk, you are still only down ten percent. Not fun but not all that hard to come back from. Plus you also get crazy moves in your favor too, and the ratio is arguably better than 50% to the positive if you are on the right side of market sentiment.

    A lot of daytraders assume swingtraders are nuts because they don't understand that swingtraders use much less leverage than daytraders do (the smart ones anyway). They let direction do the legwork instead of size- which is why they can get much BIGGER size in the long run without experiencing deterioration. The bigger you get, the more you need directional 'room' to compensate for your girth.
    #34     Jul 16, 2002
  5. Ken_DTU


    nice post, and excellent quote, above - well spoken
    #35     Jul 17, 2002
  6. yes. those are very valid arguments and points of contention. The daytrader argument against holding overnight only looks at the downside to the equation, but also assumes that the trader is short or long from the closing print. What about from much higher or lower and then holding on to the close. And what about the times you get the favorable movement between the close and the open as well. I like the comment on "leg work" and "de-leveraging". Smaller size for bigger swings with more capitalization, fewer trades with bigger profit targets, fewer entries, less commissions, less shakeout, etc...

    It is a good debate regardless of which side feels they have the bigger edge...
    #36     Jul 17, 2002
  7. I thought of a good article on swingtrading with 10 day candlecharts,written in Active Trader mag.

    Another interesting point was the article was written by Ken-
    DTU. Day Trading University.:)

    Do like the precision entry day trading requires; helped swing.
    ''Names are important''-Solomon Cohen,Gazelle Hedge fund.
    #37     Jul 17, 2002

  8. I think that pretty much sums it up...I tried swing trading
    a few years ago. I was a basket case 90% of the time.

    I'm the kind of trader that needs to know if I'm right,now!

    A long term trade for me is 30 minutes...lol

    Daytrading (and having profitable days) makes me happy.

    To me, trading is a numbers game. If you're risking $300 to
    make $900 on a swing trade or $30 dollars to make $90 on
    a daytrade, both traders are getting a 3-1 ratio, and both
    traders are going to make money if you can keep you're
    winners around 40% or better.

    I've personally never seen a swing trade method or a
    daytrade method that did much better than 50%. So, I
    don't think either style is superior or inferior.
    #38     Jul 17, 2002
  9. T/A_Bo


    I could make a long and impassioned post about why I think swingtrading is the only thing and why it works the best for me personally and the folks I’m teaching. But then I look over at Chris and Vadym, and the folks who are doing so well with that tape reading day trade style, and at Allen and his group who day trades the QQQ,... You can argue about specifics, but the “Best way” is whatever gives you consistent profitability.

    Chris and I have had this conversation more then once. For me the worst stress I can experience comes from holding a highly leveraged position in some doinky small time frame position. Each tick adds to the stress level as I wait for resolution, never knowing if some bombing in tel aviv will spike the futures and ruin my day with some nasty slippage. For Chris, stress is defined as being stuck in some slow listed stock for a few days as it hacks and gasps it’s way along. :D

    To each his own! You should expose yourself to as many styles as possible as you trade. Then you will know which suits you best, and which you will be able to stick with and specialize in over time.

    Less then a month to the Anahiem expo!

    See you there,

    -Bo Yoder
    #39     Jul 17, 2002

  10. my worst stress is when i'm running away and have to put my shoes on fast, when i get them wrong it hurts my feet all the way down the block and my insteps are sore the next day
    #40     Jul 17, 2002