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I'm still new to trading and I've decided to try swing trading for most of the reasons mentioned above. However, it's hard to get a large enough sample size of your own trades to know if you're profitable when swing trading.
Can you help answer these questions from other members on NexusFi?
I was thinking: isn't it hard to anticipate which of your trades will become a swing trade, and which ones will be a day trade? I mean, you can't just move trades over from one account to another...?
I really don't know if I can do that or not. Seems like something else to go wrong. Will look into it. Probably would vary by broker.
Prefer to swing trade. Sometimes both accounts get tied up on swing trades. Gives me flexibility. I enjoy day trading, but the real money is in swing/position trading, IMHO.
Thanks, what I am finding as I dig into some of these day trading strategies are that there is a lot that I can apply directly to swing trading. I see huge advantages to using the opening range breakout for determining an entry point in a swing trade. Great fun learning all this stuff.
I will keep an open mind. And I am learning a lot by digging into day trading strategies.
My day trading abilities are not good enough to do this myself. I was just wondering if anyone with good day trading abilities had tried comparing a short 5 day swing trade, for example to day trading each day within that same swing trade and would their day trading abilities be able to make a better profit? Had any one made that comparison for themselves.
let us say that the company you were following from day 1 to day 5 had an increase in price overall.
Scenario #1 no dips and dives in the price
You would do worse day-trading... why?... daytrading you would have 5 times as much cost in trading fees at least... could even be more if you made more than one day trade on the stock in a day.
Also let us say you day 1 the stock went from $1.00 to $1.05 (5% gain...nice) so you sell at day's end... now there is a start to day 2 but you cannot buy back in at $1.05 at the beginning... you are perhaps chasing it at $1.06... you lost a step and bit of profit doing so.... this could continue to happen each new day.
So buying more expensive at the start of the day and more fees eat into your overall return compared to the swing trader whose fees are a simple in/out fee.
Scenario #2 the stock is quite volatile moving up overall in waves.
As long as the increased number of transaction fees were worth it I suppose that you could possibly come out ahead as a daytrader... it would depend on the magnitude of those movements overcoming the increased transaction fees.
You could also say... well the daytrader would bail out earlier if the trade turned sour compared to the swing trader.
that is not necessarily so.... as a swing trader occasionally myself (though my swings last weeks usually) I can, through my charts, judge when a swing trade is exhausted and leave taking my profit. I do not say that I am in for 1 week(day), 2 weeks(days), 5 weeks(days) or set a target of such and such % profit then out. Such rigid criteria is a recipe for profit lessening or loss all together IMHO.
If you have the TA tools to judge when a run is over a swing trader has ample warning to leave a swing trade with a profit.
I am not saying that Day traders don't make money... but I doubt that successful daytraders chase a rising stock price with multiple transactions... the increased fees would kill most of the profit and record keeping for these multiple transactions for tax purposes would be daunting .... for me anyway
Although this is an interesting topic, in the end its a moot point. For every argument for one method there is a counter argument for the other method. This is the same as scalping vs intraday swing trading which has be beaten to death here without any resolution, because there is no resolution its personal preferences and financial limitations.
For example, people say day trading takes a lot of screen time.... I day trade for my primary source of income, I normally start at 9:30AM and I usually meet my daily target by noon (unless I get myself into a pickle then have to spend the rest of the day getting myself out of it). When I am done I leave and enjoy the rest of the day without having to worry about open positions.
It all boils down to the goals, preferences and talents of the individual trader and the trader must find their way by themselves.
Maybe one additional benefit is, that you can day trade by focusing on technicals alone. (I noticed, I can). As a swing trader, imho, you need to keep up with fundamentals more and focus on the market sentiment so that you are not on wrong side of the trade.