Swing and postion trading the minis

[notouch 10]

This website is focused on day trading the mini stock index futures but I thought we could get a bit of a discussion going about longer term trading. Looking at the YM charts it seems set up for a big weekly rally next week: a 50% pullback of the previous rally plus a dragonfly doji on the daily charts. Zooming in to the 30 minute charts high volume was coming in on the lows. To me the close of the 30 minute candlestick well above Friday's low was a good signal, confirmed end of day by the doji. So I kept that position open but I'm using very wide stops to keep me in the trade. I see maybe 500 points in a few weeks with a 100 point stop. What do other people look for when swing and position trading and what money management rules do you use? Does anyone use options? That would take away the difficult issue of stop placement but raises complexities of its own.

[Soultrader 12]

  notouch said:

This website is focused on day trading the mini stock index futures but I thought we could get a bit of a discussion going about longer term trading. Looking at the YM charts it seems set up for a big weekly rally next week: a 50% pullback of the previous rally plus a dragonfly doji on the daily charts. Zooming in to the 30 minute charts high volume was coming in on the lows. To me the close of the 30 minute candlestick well above Friday's low was a good signal, confirmed end of day by the doji. So I kept that position open but I'm using very wide stops to keep me in the trade. I see maybe 500 points in a few weeks with a 100 point stop. What do other people look for when swing and position trading and what money management rules do you use? Does anyone use options? That would take away the difficult issue of stop placement but raises complexities of its own.

 

Interesting notouch. I personally found the index futures a better swing trading opportunity rather than day trading it until we hit that 61.8% retracement since the decline. At this point I am neither bullish or bearish. I feel like the markets have a chance to test the double bottom and then rally. If not we will need to break past the key 61.8% fib resistance (I believe it was around 12580 - 12600) for any further rally to the upside. Just my 2cents

[wrbtrader 10]

  notouch said:

This website is focused on day trading the mini stock index futures but I thought we could get a bit of a discussion going about longer term trading...

 

What do other people look for when swing and position trading and what money management rules do you use?

 

...

 

I only swing trade or position trade during a few times per year during market seasonal tendencies.

 

I've discussed one particular tendency at the below link...

 

http://www.traderslaboratory.com/forums/f34/trend-day-confirmation-1457.html#post8215

 

As for management of the position, I used the same trade management as I do when I day trade.

 

However, the only thing different is due to the wide stop, I have to use a different position size (a lot less) to control the increased risk exposure on the initial stop/loss protection.

 

Simply, my position size for swing trading or position trading is reduced dramatically in comparison to my normal day trading position size.

 

Thus, the issue for me is position size management (the number of contracts) and that in itself is a money management method.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

[torero 10]

I'm actually looking to diversifying my portfolio to find uncorrelated markets. One thing I've been researching is the agriculture futures for swing trading (lower margins and slower volatility from what I gather so far).

 

Soul, do you mind open a forum for agriculture, metals, and interest rate section? It'd be interesting for wsam, I and anyone else who's interested in learning more these areas. Thanks.

[Soultrader 12]

  torero said:

Soul, do you mind open a forum for agriculture, metals, and interest rate section? It'd be interesting for wsam, I and anyone else who's interested in learning more these areas. Thanks.

 

No problem. I have created a sub forum under derivatives.

[notouch 10]

I agree ST that that 12600 area looks key. I think's it's going to be a slow drift up more than a sharp break. We closed strongly today so my position is still open.

 

I agree with you, NihabaAshi. The key thing is not to get hung up on the points that you're risking but instead focus on the percentage of your portfolio you're risking and for what potential gain. Long term trading allows you to keep a much cooler head and make much stronger decisions in terms of risk/reward and probability of success.

 

Torero, great idea to diversify your portfolio. I think that's the key to successful position trading. At the moment I focus on currency and stock index futures but I see oil, gold, agriculturals and fixed income futures as good products. The liquidity on CBOT's 10 year note is amazing. I want to reach the stage where I have maybe 5 long term profitable positions open at any one time and instead of just focussing on one or two markets I'm constantly checking the daily charts of a range of markets looking for long term set ups.