Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

suby

Don't Be fooled by Randomness Part2 - Day Trading Vs Swing Trading - Who Makes More?

Recommended Posts

I recently just finshed the classic novel "reminances of a stock operator" and there was a quote in the book that really struck me.

 

"No man has any business being in the market all the time"

 

Immediatly I thought to myself, thats what DAYTRADERS do! For anyone who has read the book knows the story but for those who havn't I will shed some light.

 

Jesse Livermore began trading (day trading in bucket shops). He would trade according to his system, but his results were truly abysmal. Sure the man made money but the real money came when he started to swing trade. And by swing trade he developed an idea (hypothesis), waited for certain conditions to materalize, and then bet. Really that simple.

 

The reason why I am writing this is because I have recently revisted some threads on this forum (i.e. Don't be fooled by randomness) and it has become apparent to me that the majority of traders on this forum are day traders. I could be very wrong, so please correct me if I am.

 

In my short trading career thus far I can admitt that trading without a plan/hypothesis is gambling. Better yet its a waste of time. There is ZERO predictive power from the patterns of 1/5/15min bars (bullflag,S/R, etc). All of my success has come from swing trading.

 

I will stop my rambling at this point and open up the thread. Who day trades and who swing trades? Whats your personal preference? If you are a day trader, what do you do to make yourself a winner? If your a swing trader, how do you develop your hypothesis before entering into a trade

 

Disclaimer: I am not disregarding the valdity of technical analysis - This is a thread dedicated towards Noise/Randomness/DAYTrading Vs being able to quantify something/Swing Trade

 

Suby

Share this post


Link to post
Share on other sites

 

Disclaimer: I am not disregarding the valdity of technical analysis - This is a thread dedicated towards Noise/Randomness/DAYTrading Vs being able to quantify something/Swing Trade

 

Suby

 

You're setting up a false dichotomy. There is no difference between day trading and swing trading except for the bar interval, if one is using bars. Remove the X and Y axes and you'd be hard-pressed to tell the difference. That you've been unsuccessful at daytrading may mean only that you've approached it in the wrong way.

Share this post


Link to post
Share on other sites
You're setting up a false dichotomy. There is no difference between day trading and swing trading except for the bar interval, if one is using bars. Remove the X and Y axes and you'd be hard-pressed to tell the difference. That you've been unsuccessful at daytrading may mean only that you've approached it in the wrong way.

 

DB,

 

How should one approach day trading?

Share this post


Link to post
Share on other sites

This is good solid advice, that unfortunately few will follow, probably because of the effort that is required to take it all the way to its conclusion(s).

 

I offer similar advice but from a slightly different perspective....perhaps a summary of it will add value

 

If a person decides to try to learn this business there are basically two approaches. The first is to study independently using readily available resources on the Internet, from the exchanges and from third party providers of educational content related to trading as a business. Approaching it this way takes time, because you have to wade through content that is dated, filled with half truths, or in some instances completely fallacious...and of course the tendency is for provider to slant the content of educational materials in order to direct the reader to buy additional products or services...

 

The second is to find a skilled professional educator or trading professional willing to A) demonstrate proficiency and B) spend sufficient time with students to provide the basic background and guidance needed to trade profitably. For those who have been here a while, the pitfalls and obstacles are obvious....most of the self proclaimed providers are simply opportunistic folk, who are one step ahead of the student....unable to trade profitably themselves, they attempt to portray themselves as experts, and often the services they attempt to provide are overpriced and ineffective. The final "proof" of this is that when pressed to demonstrate their skills they resist, and finally withdraw to any arena where less knowledgeable customers exist....in other words they prey on the naïve, ignorant and struggling would-be traders.

 

As mentioned many times previously, part of the problem is that the struggling or new trader doesn't understand how to evaluate products and services. The simplest answer is

"start out reading and learning independently as much as possible, developing enough background, at minimum cost, so that you CAN intelligently evaluate vendors, AND rather than demand detailed record of profitable trading (which can easily be falsified) ask instead to observe a prospective vendor while they trade live. Record the sessions, independently and then evaluate both the result (did they make money), the risk, and the method (decision making)...ask yourself if what you see is a good fit, or if it is not, can you adjust yourself (within reason) to that type of approach....if the answer is yes, you MAY have found a good candidate (vendor) to teach you how to trade. If the answer is no, move on to the next candidate on your list...

 

Its hard work, but like most things in life, generally you receive based on the effort you put into it....

 

Best Regards

Steve

Share this post


Link to post
Share on other sites
Remove the X and Y axes and you'd be hard-pressed to tell the difference.

 

Have a look at your commissions and spread (fixed, whether you're holding for a thousandth of a second or 3 years), and you'll be hard pressed not to :)

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
Have a look at your commissions and spread (fixed, whether you're holding for a thousandth of a second or 3 years), and you'll be hard pressed not to :)

 

BlueHorseshoe

 

None of that shows on a chart.

 

The point is that whether a daytrader or swing trader "makes more" has absolutely nothing to do with whether the trader is daytrading or swing trading but rather with the competence of the trader.

Share this post


Link to post
Share on other sites
None of that shows on a chart.

 

The point is that whether a daytrader or swing trader "makes more" has absolutely nothing to do with whether the trader is daytrading or swing trading but rather with the competence of the trader.

 

Actually has a lot to do with it Db. If your flying in and out of positions, commisions and slippage can easily eat someone up.

 

the purpose of this thread as mentioned is who is more profitable swing or day trader with the use of a hypothesis.

 

I understand that you are a daytrader Db and you are also fond of the NQ (also my contract of choice).

 

Can you give me an example of how you would enter into a trade? What criteria are you looking for? whats the avg duration of your trades? On avg how many points do you aim for on a day trade? most importantly out of 100 trades, how many of them are profitable?

Share this post


Link to post
Share on other sites
Actually has a lot to do with it Db. If your flying in and out of positions, commisions and slippage can easily eat someone up.

 

Well, no, it doesn't. It depends more on the ratio of points to commissions, and there need be no slippage at all. Don't confuse trading intraday swings with scalping.

 

the purpose of this thread as mentioned is who is more profitable swing or day trader with the use of a hypothesis.

 

But the question is unanswerable unless you control a hell of a lot of variables. If you want an answer that means anything, then daytrade for a few weeks and swing trade for a few weeks and answer it for yourself. It's the only answer that will have any relevance to your situation.

 

I understand that you are a daytrader Db and you are also fond of the NQ (also my contract of choice).

 

I'm a daytrader and a swing trader and a position trader. It's all good.

 

Can you give me an example of how you would enter into a trade? What criteria are you looking for? whats the avg duration of your trades? On avg how many points do you aim for on a day trade? most importantly out of 100 trades, how many of them are profitable?

 

See the Wyckoff Forum. Loads of trades, loads of charts, loads of criteria. But none of it is going to do you much good unless and until you begin to develop a trading plan. Whatever somebody else does or doesn't do or says they do or whatever is irrelevant to you since nearly everybody lies.

 

This is your 35th thread. If your interest is primarily in chat, that's great. But you appear to be directionless. If that's the case, then asking people what their results are isn't going to put you on track and keep you there. At some point, you're going to have to sit down in front of your computer screen with a pad and pencil and work out something that is profitable for you. How do you enter a trade? What criteria do you look for? What's the average duration of your trades? How many points do you aim for? What's your win:loss ratio? If you can provide the answers to these questions, you might get a conversation going. Otherwise, it's just a tutorial, and given all the time you've been at this, you shouldn't need that any longer.

 

..........................

Share this post


Link to post
Share on other sites

Every once in a while I read something that to me represents the bare bones truth of the matter. This is what I see in Db's post above.....

 

Clearly people have to struggle with their own demons, their own wish to be taken care of and their own limitations...and to me the exciting thing about living is that we all have the possibility of rising above our all too human limitations and choosing a different path....we can in effect create our own success IF WE CHOOSE TO......

 

this for me is the reason I continue to show up....it happened in my life and I try to provide that possibility for folks periodically...when on the few occasions I read something like this I feel hopeful that someone out there will decide to get up off their butt, and do something useful for themselves..

 

Best of luck folks

Edited by steve46

Share this post


Link to post
Share on other sites
You're setting up a false dichotomy. There is no difference between day trading and swing trading except for the bar interval, if one is using bars. Remove the X and Y axes and you'd be hard-pressed to tell the difference. That you've been unsuccessful at daytrading may mean only that you've approached it in the wrong way.

 

You only have to look at a 5 min chart of a stock over a preiod of a few days and you'll see a clear difference between intraday price variation and price variation on daily charts.

 

The difference is obvious.

Share this post


Link to post
Share on other sites
None of that shows on a chart.

 

The point is that whether a daytrader or swing trader "makes more" has absolutely nothing to do with whether the trader is daytrading or swing trading but rather with the competence of the trader.

 

Successfully exploiting what is visually/graphically an identical price movement on a daily chart will result in a greater net gain than exploiting the same price movement on an intraday chart, but the fixed costs will remain the same for both.

 

Take the left hand chart you have posted above. Select an entry and exit point that would result in a profitable trade. If that chart were daily, you might have made 100 ticks per contract. If the chart were one minute, you might have made 2 ticks per contract. Both from what, graphically, is an identical price movement. If your fixed costs are 1 tick then you make 99 ticks in the first instance, and 1 in the second.

 

The question is, can you perform the second procedure 99 times for every one time you perform the first? Or, is your risk sufficiently limited in the second for you to perform it once with 99x the position size of the first? Or 10 times with 9.9x the position size of the first etc? If you can do this then your returns will probably be less volatile (great for money management, and perhaps the main benefit of successful daytrading), and your "edge" will have more opportunity to play itself out.

 

Expectancy x Opportunity is the key concept in understanding this.

 

I agree though - visually, I would doubt that anyone can consistently distinguish between a daily and an intraday chart and, unless we're talking about execution-specific strategies, that there would be any merit to trading the one differently from the other.

 

And of course, the more competent trader makes the most, as you say.

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
There is ZERO predictive power from the patterns of 1/5/15min bars (bullflag,S/R, etc).

 

Remove the X and Y axes and you'd be hard-pressed to tell the difference.

 

Have a look at your commissions and spread...

 

None of that shows on a chart.

 

Actually has a lot to do with it Db...

 

suby,

 

Commissions, spreads, and slippage have nothing to do with the predictive power of TA on smaller time-frames vs longer time-frames. Your original statement was not addressing lower profitablility on lower time-frames due to higher costs...you boldly stated that there is no predictive power on shorter time-frames.

Share this post


Link to post
Share on other sites

Re: being in the market all the time - that is actually not necessarily what day traders do.. The defining activity for day trading is entering and exiting within the same day; trading every day is not implicit. May want to look into why some days are more attractive to trade than others.. :2c:

Share this post


Link to post
Share on other sites
Re: being in the market all the time - that is actually not necessarily what day traders do.. The defining activity for day trading is entering and exiting within the same day; trading every day is not implicit. May want to look into why some days are more attractive to trade than others.. :2c:

 

I'm not naive and oblivious; however, many active traders (especially new ones) end up treating their trading like accounts like a slot machine at the casino.

Share this post


Link to post
Share on other sites
suby,

 

Commissions, spreads, and slippage have nothing to do with the predictive power of TA on smaller time-frames vs longer time-frames. Your original statement was not addressing lower profitablility on lower time-frames due to higher costs...you boldly stated that there is no predictive power on shorter time-frames.

 

Cory,

 

When i initially posted, I was somewhat ranting but let me clarify. Day trading/intraday trading is a shorter time frame than one who swing trades with EOD data. Many will argue with me that there is no differnce (all good). Intraday trading has way more noise than swing trading and I can back that up to anyone who wants to disagree with that statement. I posted this thread to generate discussion to those who have had success trading intraday (consistently).

 

The fact of the matter is day trading/intraday trading is a lot harder than swing trading in my opinion atleast and I'm curious to hear some of the methods that the community deploys to take advantage of these anomalies. Am I saying that market is random...? no. Due to the market structure (specifically in the equities space) theres a lot more noise in intraday trading as i;ve said a million times before. With that being said... Take a stock the Citibank ©. Take its OHLC prices for its previous days, and closely watch what happens when it hits these levels. You can thank me later for the free ATM

Share this post


Link to post
Share on other sites
Cory,

 

When i initially posted, I was somewhat ranting but let me clarify. Day trading/intraday trading is a shorter time frame than one who swing trades with EOD data. Many will argue with me that there is no differnce (all good). Intraday trading has way more noise than swing trading and I can back that up to anyone who wants to disagree with that statement. I posted this thread to generate discussion to those who have had success trading intraday (consistently).

 

The fact of the matter is day trading/intraday trading is a lot harder than swing trading in my opinion atleast and I'm curious to hear some of the methods that the community deploys to take advantage of these anomalies. Am I saying that market is random...? no. Due to the market structure (specifically in the equities space) theres a lot more noise in intraday trading as i;ve said a million times before. With that being said... Take a stock the Citibank ©. Take its OHLC prices for its previous days, and closely watch what happens when it hits these levels. You can thank me later for the free ATM

 

And one more thing, I boldly stand by what I said earlier that technical analysis has ZERO predictive power when one is applying it to a 1/5/10 min time frame. I stand by that

Share this post


Link to post
Share on other sites
And one more thing, I boldly stand by what I said earlier that technical analysis has ZERO predictive power when one is applying it to a 1/5/10 min time frame. I stand by that

 

There is a lot of information in those time frames. It's going to be tough seeing it until you change that belief.

Share this post


Link to post
Share on other sites
There is a lot of information in those time frames. It's going to be tough seeing it until you change that belief.

 

Absolutely agree with Onesmith. Couldn't have said it better than that.....

Share this post


Link to post
Share on other sites
There is a lot of information in those time frames. It's going to be tough seeing it until you change that belief.

 

There's a lot of information about everything everywhere. The volume of information doesn't seem important to me - the information's utility is all that matters.

 

The information contained in any timeframe is only as valuable as its utility permits, and that depends on the strategy being deployed.

 

Information from one timeframe can, of course, have utility in other timeframes.

 

It is sensible to focus on the information that provides the greatest utility for the strategy in question, wherever that information comes from.

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
It is sensible to focus on the information that provides the greatest utility for the strategy in question, wherever that information comes from.

 

I get that. ......pre-narrowing the search to a few near optimal time frames is beneficial. Some time frames nearly always have lots of noise and little if any signal. Logically it makes sense to toss out the time frames that are not likely to give signals.

 

....but if you only try things everyone tries you will never be pleasantly surprised because you never do anything different than anyone has already done. It can't work the way everyone thinks it should. We are not the only ones smart enough to be efficient, to follow the scientific method, to stick to what's sensible or whatever label you prefer for doing what everyone who is educated knows is the rational thing to do.

 

For the specific case ...which time frames should be excluded. The absence of any time frame is a mistake.

 

Counter intuitive for the win everytime. That timeframe that only gives one signal over some rediculous amount of time like an entire lifetime, is the signal that's strong enough to model strats (using the significantly small enough sample size of one.) that will work on every timeframe and every symbol.

 

var: sensible(efficient), inefficient(invertsensible);

Share this post


Link to post
Share on other sites
Out of 100 trades Db,

 

whats your hit rate like?

 

How about you tell us about your "swing trade" hit rate and win loss ratio.

 

I have a feeling you are grasping to find a comfort zone in your trading.

 

Trading the ES, I am currently running at a 20.17% win rate. That might make you feel a little queezy, but it is very profitable. If you study your price action and charts you might get a clue as to how I trade to achieve the result.

 

Sometimes you can label it a daytading system,like today ...thankyou market, other days it is one hell of a grind, but we achieve our goal (profitability) and await for the next opportunity..

 

I use an indicator,God forbid!! Predictability is not part of the equation...

 

On the other hand, I also trade a method that is totally random and the is a one day trade, win or loss and that is a lot higher win/loss ratio.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 8th April 2025.   Markets Rebound Cautiously as US-China Tariff Tensions Deepen     Global markets staged a tentative recovery on Tuesday following a wave of volatility sparked by escalating trade tensions between the United States and China. The Asia-Pacific region showed signs of stability after a chaotic start to the week—though some pockets remained under pressure. Taiwan’s Taiex dropped 4.4%, dragged lower by losses in tech heavyweight TSMC. The world’s largest chipmaker fell another 4% on Tuesday and has now slumped 13.5% since April 2, when US President Donald Trump first unveiled what he called ‘Liberation Day’ tariffs.   However, broader sentiment across the region turned more positive, with several markets rebounding sharply after Monday’s dramatic sell-offs. Japan’s Nikkei 225 surged over 6% in early trading, rebounding from an 18-month low. South Korea’s Kospi rose marginally, and Australia’s ASX 200 gained 1.9%, driven by strength in mining stocks. Hong Kong’s Hang Seng rose 1.6%, though still far from recovering from Monday’s 13.2% crash—its worst day since the 1997 Asian financial crisis. China’s Shanghai Composite added 0.9%.   In Europe, DAX and FTSE 100 are up more than 1% in opening trade. EU Commission President von der Leyen repeated yesterday that the EU had offered reciprocal zero tariffs on manufactured goods previously and continues to stand by that offer. Others are also trying again to talk to Trump to get some sort of agreement that limits the impact.   Much of the rally appeared to be driven by dip-buying, as well as hopes that the intensifying trade war could still be defused through negotiations.   China Strikes Back: ‘We Will Fight to the End’   Tensions reached a boiling point after Trump threatened to impose an additional 50% tariff on all Chinese imports unless Beijing rolled back its retaliatory measures by April 8. ‘If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow... the United States will impose additional tariffs on China of 50%,’ Trump declared on social media.   If implemented, the new tariffs would bring total US duties on Chinese goods to a staggering 124%, factoring in the existing 20%, the 34% recently announced, and the proposed 50%.   In response, China’s Ministry of Commerce issued a stern warning, stating: ‘The US threat to escalate tariffs is a mistake on top of a mistake... If the US insists on its own way, China will fight to the end.’ The ministry also called for equal and respectful dialogue, though signs of compromise on either side remain scarce.   Beijing acted quickly to contain a market fallout. State funds intervened to support equities, and the People’s Bank of China set the yuan fixing at its weakest level since September 2023 to boost export competitiveness. Additionally, five-year interest rate swaps in China fell to their lowest levels since 2020, indicating potential for further monetary easing.   Trump Talks Tough on EU Too   Trump’s hardline approach extended beyond China. Speaking at a press conference, he rejected the European Union’s offer to eliminate tariffs on cars and industrial goods, accusing the bloc of ‘being very bad to us.’ He insisted that Europe would need to source its energy from the US, claiming the US could ‘knock off $350 billion in one week.’   The EU, meanwhile, backed away from a proposed 50% retaliatory tariff on American whiskey, opting instead for 25% duties on selected US goods in response to Trump’s steel and aluminium tariffs.     Volatile Wall Street Adds to the Drama   Wall Street experienced wild swings on Monday as investors processed the rapidly evolving trade conflict. The S&P 500 briefly fell 4.7% before rebounding 3.4%, nearly erasing its losses in what could have been its biggest one-day jump in years—if it had held. The Dow Jones Industrial Average sank by as much as 1,700 points early in the day but later climbed nearly 900 points before closing 349 points lower, down 0.9%. The Nasdaq ended up 0.1%.   The brief rally was fueled by a false rumour that Trump was considering a 90-day pause on tariffs—rumours that the White House quickly labelled ‘fake news.’ The market's sharp reaction underscored how desperate investors are for any sign that tensions might ease.   Oil Markets in Focus: Goldman Sachs Revises Forecasts   Crude prices also reflected the uncertainty, with US crude briefly dipping below $60 per barrel for the first time since 2021. As of early Tuesday, Brent crude was trading at $64.72, while WTI hovered around $61.26.   Goldman Sachs, in a note dated April 7, lowered its average price forecasts for Brent and WTI through 2025 and 2026, citing mounting recession risks and the potential for higher-than-expected supply from OPEC+.       Under a base-case scenario where the US avoids a recession and tariffs are reduced significantly before the April 9 implementation date, Goldman sees Brent at $62 per barrel and WTI at $58 by December 2025. These figures fall further to $55 and $51, respectively, by the end of 2026. This outlook also assumes moderate output increases from eight OPEC+ countries, with incremental boosts of 130,000–140,000 barrels per day in June and July.   However, should the US slip into a typical recession and OPEC production aligns with the bank’s baseline assumptions, Brent could retreat to $58 by the end of this year and to $50 by December 2026.   In a more bearish scenario involving a global GDP slowdown and no change to OPEC+ output levels, Brent prices might fall to $54 by year-end and $45 by late 2026. The most extreme projection—based on a simultaneous economic downturn and a full reversal of OPEC+ production cuts—would see Brent plunge to below $40 per barrel by the end of 2026.   Goldman noted that oil prices could outperform forecasts significantly if there was a dramatic shift in tariff policy and a surprise in global demand recovery.   Cautious Optimism, But Warnings Persist   With both Washington and Beijing showing no signs of backing down, markets are likely to remain volatile in the days ahead. Investors now turn their attention to upcoming trade meetings and policy decisions, hoping for clarity in what has become one of the most unpredictable trading environments in recent years.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • CVNA Carvana stock watch, rebound to 166.56 support area at https://stockconsultant.com/?CVNA
    • CVNA Carvana stock watch, rebound to 166.56 support area at https://stockconsultant.com/?CVNA
    • CVNA Carvana stock watch, rebound to 166.56 support area at https://stockconsultant.com/?CVNA
    • CVNA Carvana stock watch, rebound to 166.56 support area at https://stockconsultant.com/?CVNA
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.