Which is more difficult? Day-trading or position trading

This is a discussion on Which is more difficult? Day-trading or position trading within the Home Trader forums, part of the Trading Career category; Personally I think day-trading requires the most knowledge, not to mention the time you have to put into it....

View Poll Results: Which is more difficult?
Day-trading 38 86.36%
Position trading 6 13.64%
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Old Nov 4, 2005, 2:44pm   #1
 
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Which is more difficult? Day-trading or position trading

Personally I think day-trading requires the most knowledge, not to mention the time you have to put into it.
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Old Nov 4, 2005, 9:43pm   #2
 
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i don't believe either one is more difficult than the other. If one can succesfully trade then its just a case of which suits their preferred trading style or personality.
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Old Nov 15, 2005, 2:06am   #3
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The best advice I have heard is swing/position trade (small) until you have acquired the subconscious pattern recognition of markets and how they move. In day trading some instruments it is too fast for you to have time to think things through. The best trades/best exits from what would have been losing trades are the ones where I just act, because I just 'know' but don't know what I know until maybe afterwards*. As a new trader you will likely freeze and then due to the speed the loss may become "too big to take" in that time. If nothing else protect yourself with hard stops entered at entry to protect yourself in the "rabbit [in the headlights] zone" I still freeze and I use hard stops most of the time.

* not the same as acting on emotion/fear reflex eg closing out a trade miles from your stop because of a couple of down ticks. done it before , will do it again.
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Old Nov 15, 2005, 3:25am   #4
 
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If Position trading is as in medium to long term, then Day trading is a micro version of Position trading.

But Position trading requires a longer waiting time for the price to fall into the trap, compared to Day trading which can happen a few times a day.
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Old Nov 15, 2005, 9:26am   #5
 
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in day trading you are looking for smaller trades compared to position or swing trading. The smaller trade size means that your costs of doing business, the bid/ask spread and commissions are bigger % factors to cover in each trade, which erode your edge and therefore statistically make it harder to daytrade vs position trade.

of course, in position trading, you need more capital to run the overnight margins and eat the inevitable bigger draws when positions run against you. bigger profits, but also bigger drawdowns.
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Old Nov 16, 2005, 3:25am   #6
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DT is easier but with a smaller Reward : Risk profile .

PT is the opposite , which I prefer , I'm in this to win as much as possible not to make 125 trades a week and feel clever about it .

I trade or have traded the DAX for sums of E200-300K and have never had to increase my O/Ns , that just happens to lising positions I believe .

O/N can be dangerous but then again hey this is the market and if you ain't prepared and I mean truly prepared for that , then don't trade . If carefully calculated , you can reap huge gains from O/N moves - can be truly spectacular.
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Old Nov 16, 2005, 8:05am   #7
 
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Quote:
Originally Posted by Stockjunkie
I trade or have traded the DAX for sums of E200-300K and have never had to increase my O/Ns , that just happens to lising positions I believe
if your broker doesnt give you an intraday margin then you will be fully margined and wont need to post extra overnight margin. the exchanges require you to post full margin for overnight holdings.
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Old Nov 16, 2005, 8:16am   #8
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nah, Day-trading is more difficult then position trading. It's emotional harder I think. You also need a lot of market knowledge to be a good daytrader. You need to know what the fast money probably does, what the paper does etc.. swingtrading is just look for a resistance write on your notebook where to get out and that's it.
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Old Nov 16, 2005, 12:19pm   #9
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DT at the end of the day is inferior to PT in my view .

DT brings to mind the lines of dweebs sitting in offices in some US city , putting on trades w/o stops and then bitting their fingers . After that they go psycho and shot everyone .
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Old Nov 16, 2005, 1:23pm   #10
 
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What is the optimal holding period for position trading, is it 1-5 days or over a week? For something like YM, how many points per week is realistic to achieve?
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Old Nov 16, 2005, 7:22pm   #11
 
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Quote:
Originally Posted by mokwit
The best advice I have heard is swing/position trade (small) until you have acquired the subconscious pattern recognition of markets and how they move. In day trading some instruments it is too fast for you to have time to think things through. The best trades/best exits from what would have been losing trades are the ones where I just act, because I just 'know' but don't know what I know until maybe afterwards*. As a new trader you will likely freeze and then due to the speed the loss may become "too big to take" in that time. If nothing else protect yourself with hard stops entered at entry to protect yourself in the "rabbit [in the headlights] zone" I still freeze and I use hard stops most of the time.

* not the same as acting on emotion/fear reflex eg closing out a trade miles from your stop because of a couple of down ticks. done it before , will do it again.

Good reply. This I agree with.
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Old Nov 16, 2005, 8:12pm   #12
 
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Quote:
Originally Posted by Stockjunkie
DT at the end of the day is inferior to PT in my view .

DT brings to mind the lines of dweebs sitting in offices in some US city , putting on trades w/o stops and then bitting their fingers . After that they go psycho and shot everyone .
Position trading makes me think of Nick Leeson.

Neither way is superior, both have their advantages and disadvantages.
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Old Nov 16, 2005, 9:00pm   #13
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I would agree with Arbitrageur. How can PT be easier than DT? If you know your longer timeframes then you should have a good idea of the shorter timeframes. Don't start going on about WL ratios either, that goes with the territory. Theoretically, DTers should make more points than PTers, theoretically. Do the math. Who's a good trader? Who's a bad trader? Which one PTs? Which one DTs? You tell me.
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Old Nov 16, 2005, 10:58pm   #14
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Quote:
Originally Posted by Arbitrageur
Position trading makes me think of Nick Leeson.

Lesson was an illegal bum . He was neither a PT or DT or any T for that matter .


Quote:
Originally Posted by Arbitrageur
Neither way is superior, both have their advantages and disadvantages.

That's subjective and based upon my considerable experience and good results , I believe I make a valid point .

You do know that arbing is not DT in the real sense ? DT is just mini PT .
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Old Nov 16, 2005, 11:31pm   #15
 
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If it was possible to take a year's worth of position trades (signals from an hourly chart) and compress them into a month, i.e divide time by 12, you would have the rough equivalent of a month's worth of day trades on a 5 minute chart.

One is a just a fractal of the other, so in theory they should be equally difficult, were it not for

a. the ability of the PT to hold overnight.
b. the extra commission cost of daytrading due to increased trade frequency
c. the extra time and speed of mental processing required to daytrade. It is harder to concentrate for 8 hours straight than it is to carefully find, build and manage a position over a period of days.

However the competent DTer does have the advantage of being able to read the market's moves more accurately. It is easier to predict what the Dow will do in the next minute than what it will do in the next 12 hours. (S)he also can apply tigher money management and still make a decent living by risking a tiny fraction of capital per trade.

I would say that day trading is harder but the potential rewards are richer, for those that have the aptitude.

Perhaps the question should be not "Which is more difficult?" in an objective sense, but "Which do you find more difficult?". Were it not for the overnights and commissions I would say the answer would depend entirely on character.
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