New to swing trading

This is a discussion on New to swing trading within the Swing & Position Trading forums, part of the Methods category; I can't comment on what I don't know so all I will say, for informative reasons, is that Fins costs ...

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Old Jun 24, 2008, 6:44am   #16
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I can't comment on what I don't know so all I will say, for informative reasons, is that Fins costs 100 pounds to open an account and they have a minimum trade of 50p.

When the markets close, If you have a future, that instrument is traded on Globex, in Chicago. Sometimes, quite wild swings take place, triggering even the farthest stops and you can wake up with no trade. The same can happen with a rolling trade because, although your instrument is closed for the night, the gap the next morning, when the market opens, will make it impossible to close that trade at opening.

There are two groups of traders. Those who assume the overnight risk and those who close the trade before the close. With swing trading, you have to take the former choice as one of the risks involved.
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Old Jun 24, 2008, 12:36pm   #17
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si1503 started this thread Sure. FYI I will be trading mostly equities and sometimes commodities. Hopefully that sort of thing will not be too much of an issue, but of course, I am aware the risk is always there, at any moment anything can happen.
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Old Sep 20, 2008, 6:56pm   #18
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I wanted to know how can swing trading or any techniical tool work if dsow goes 300 points up one day 500 points the other day again 200 point up next day no pattern can work in such volatilty I also want to know how to start a new thread
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Old Sep 20, 2008, 7:06pm   #19
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The SP500 seems to work quite well for me overnight, without the swings that you describe. Take a look.

You can start a new thread by going to the forum page, selecting your forum and at the top left you will find the button.

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Old Sep 21, 2008, 12:00pm   #20
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Hi scahuc -

There's TA and there's TA. But the sort of TA you choose should be the type that supports and informs your trading, so there's not much point worrying about head and shoulder patterns that develop across a 4-month time frame if you are trading with a 4-hour or 3-day horizon.

The exeptional volatility we have recently experienced can be ignored. If you have system that works with normal market conditions that apply 90% of the time, you don't even have to trade when the market is behaving unusually. Don't throw out a system just because you don't make a profit on a +/-500 point day, as long as you don't make a huge loss you can ignore these as they are so rare.
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Thanks! The following members like this post: mechtraderpro
Old Dec 9, 2008, 9:59am   #21
 
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Originally Posted by tomorton View Post
Hi scahuc -

There's TA and there's TA. But the sort of TA you choose should be the type that supports and informs your trading, so there's not much point worrying about head and shoulder patterns that develop across a 4-month time frame if you are trading with a 4-hour or 3-day horizon.

The exeptional volatility we have recently experienced can be ignored. If you have system that works with normal market conditions that apply 90% of the time, you don't even have to trade when the market is behaving unusually. Don't throw out a system just because you don't make a profit on a +/-500 point day, as long as you don't make a huge loss you can ignore these as they are so rare.
One of the most sensible posts on this forum in a LONG time !!
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Old Dec 11, 2008, 3:05pm   #22
 
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Simon, you can do as I've done and download the free trial for sharescope. It gives you old data on it from last year but you can play around with it and see if it suits you and has the tools you need. I am currently finding it a bit hard to get to grips with but I'm sure I'll get used to it. Good luck,

Sam.

P.S. Here is the link ShareScope downloads
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Old Mar 30, 2009, 7:33pm   #23
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for few days trades to a week or so, would you need Live Data Level 2 pricing system???

Or could you do just fine with internet site exectution brokers like selftrade, hoodless, TDwaterhouse, yahoo finance, barclays etc. Where they are delayed by 15 mins and you have to refresh constatly or keep trying to BUY so you get an offer which you can accept or decline.

Someone said NOT having Live price feed is like fighting blind.
I dont wanna be a day trader full time as i have other commitments filling my time.
But i do want to take trading seriously, keeping up to date most days, making a handful of trades per month.

Spotting quick opportunities, either same day or few days.

Thanks.
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Old Mar 30, 2009, 7:48pm   #24
 
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No, you don't need level 2 data for swing trading. In fact, and I'm sure I'll be corrected if I am wrong, I imagine it would be completely useless for swing trading. I think mainly scalpers use level 2 for spotting buying and selling pressure and where the volume is at etc. 15 minute delayed data should be ok for swing trading as long as the charting software has all the features you need. Live data (not level 2) would be better but not essential. If you want to spreadbet most brokers will supply you with live data. If you want DMA, there are probably better brokers than the ones you mentioned.

Sam
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Old Mar 30, 2009, 8:07pm   #25
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No, you don't need level 2 data for swing trading. In fact, and I'm sure I'll be corrected if I am wrong, I imagine it would be completely useless for swing trading. I think mainly scalpers use level 2 for spotting buying and selling pressure and where the volume is at etc. 15 minute delayed data should be ok for swing trading as long as the charting software has all the features you need. Live data (not level 2) would be better but not essential. If you want to spreadbet most brokers will supply you with live data. If you want DMA, there are probably better brokers than the ones you mentioned.

Sam
thankyou.
So what i am talking about, is called swing trading?
I know a day trader who uses Level 2 pricing, enters and exits trades in same day/hour(s), when increases of a few pennies per share, making nice profits.
Is he swing trading?

Charting software? The broker sites have charts, i think selftrade have the best charts, out of all the ones ive tried.

So studying charts is ESSENTIAL for me?
Ive actaully been making trades based on news speculation and other indicators exclusively.

DMA, spreadbet... thats way too advanced for me yet. Im in early stages of this learning process. I dont think im gonna continue with hoodless. Selftrade maybe.
But have just opened a TD waterhouse account, ill see how that is.

Apple mac is not good for this stuff man. The charts often are messed up or errors.
So im running windows xp on virtualisation on mac, gets pretty hectic back and forth with like 3 diff browsers running. And then it often crashes.
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Old Mar 30, 2009, 9:35pm   #26
 
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Yes - generally positions opened and closed within the same day is refered to as day trading, holding from days to weeks is refered to as swing trading, and longer term trading is know as position trading or trend following or simply investing where you would buy and hold sometimes for many years. The style of day trading that the trader you know does could be refered to as scalping. This is when a position is held for a very short time with the aim of catching lots of small profits. Level 2 (I've never used it so my description will be poor!) is software that shows you the 'order book'. Where everyones orders are placed and where all the pending orders are. It also shows you advanced volume information which I believe scalpers interperet to make their decision. This is generally regarded as the most difficult and demanding of all trading styles.

So yes if you intend on holding from days to weeks, that would be swing trading and no your guy isn't swing trading, he's day trading and possibly scalping. Before you start trading you need a plan. You can't just buy and sell on a whim. You'll never make any money doing that. You need to develop an edge. This is buy far the most difficult aspect of trading - developing and maintaining an edge. This is when you can consistently apply a system that is consistently profitable.

Now when developing your system/strategy/methodology or whatever you want to call it. You have to first decide whether you will use technical analysis, fundamental analysis, or a combination of the two. Technical analysis is the study of charts using concepts such as - support and resistance, candlestick patterns, trendlines, indicators (their usefulness is highly debated!), etc. Fundamental analysis on the other hand is the study of... well... the fundamentals! For example, if one is trading stocks they would look at debt levels, PE ratios, profits, assets, capital, director dealing etc.

Scalpers will pretty much only look at technical analysis whereas longer term traders and investors will probably look more at the fundamentals. Most technical analysts would say that all the fundamentals are already priced into a instrument and I'd tend to agree. So I'd advise you to learn about technical analysis/charting for swing trading. So yes I'd stay studying charts is essential for you. Being consistently profitable from using indicators and news speculation will be very difficult. There is a thread on the 'general trading chat' page about trading the news and there are many about trading with indicators. Countless arguments for and against. The main problem with indicators is that they are lagging, they use past data to give a signal. Many people use these signals or combinations of signals to predict future price movements. Unfortunately its not as easy as making a trade based on a signal from an indicator. If it was, everyone would be doing it. However, I know some people use many combinations of signals to make trades sucessfully.

DMA is direct market access. It basically refers to buying or selling a particular instrument (forex, stocks, indicies, commodities etc.). Whereas spreadbetting is placing a bet on the instrument to move up or down. Same principal really but different advantages and disadvantages to both. With DMA you have to pay commision, with spreadbetting you have a bigger spread (difference between buy and sell prices). DMA you have to pay tax on profits, spreadbetting you don't as it is classed as gambling. Its classed as gambling because you can vary your stake. Check out Interactive Brokers for DMA or IG Index or futuresbetting for spreadbetting.

I'd say if you want to learn how to trade you have to be prepared for a lot of hard work. Unfortunately its not as easy as it appears. The 2 most important things I feel you should learn about are 'Support and Resistance' and 'Money Management'. Also be carefull what you read on this website. There is a lot of good stuff, but there is more bullsh1t. Its a good laugh though and some great guys and girls around. Get a few books and learn the basics.

All the best,

Sam.
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Old Mar 31, 2009, 1:37pm   #27
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Originally Posted by megamuel View Post
No, you don't need level 2 data for swing trading. In fact, and I'm sure I'll be corrected if I am wrong, I imagine it would be completely useless for swing trading. I think mainly scalpers use level 2 for spotting buying and selling pressure and where the volume is at etc. 15 minute delayed data should be ok for swing trading as long as the charting software has all the features you need. Live data (not level 2) would be better but not essential. If you want to spreadbet most brokers will supply you with live data. If you want DMA, there are probably better brokers than the ones you mentioned.

Sam
Yeah thats good to hear. Only day traders and such would need that.
Charting software? I think selftrade have pretty decent charting facilities.
Live Data? Is this like live price info basically, without all the extra bits and bobs of proper level 2? Where could i find Live data?
thankyou for such a in depth reply.
Yeah i think i would prefer swing trading over few days if not weeks/month.
I do have a handful of trading books im currently working through.

About support and resistance. Do we have to draw our own lines on the chart?
or does charting software do it automatically?
With selftrade, you have to draw the lines yourself.

But how long a time frame should we use? When working out support and resistance?

thanks sam.

Last edited by jonboy123; Mar 31, 2009 at 10:50pm.
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