Markets too volatile for swing traders

[alirees]

Hi All, Just some random musings I was having about why I think I am going wrong with my trading / spreadbetting.

The key driver my BAD trading currently is that markets are volatile so I am trying to trade a lot. Quite often when I don't see very strong technical patterns and much more of a momentum "punt" type trade based on my view of sentiment and any news I might see coming up on my various news feeds. Nothing unoriginal there then.

I do find however that actually I am trying to day trade when in fact I have normally and only ever been a swing trader. I spend most of my time licking wounds over multiple small losses day in day out as I continually get stopped out. Even after adjusting my positions to account for volatility with risk:reward of often 1:1 or less (I know, terrible, terrible trading!!) plus ensuring I was well hidden behind good solid support / resistance I still made losses and found myself in a situation of halting trading completely.

As more of a spreadbetter than a trader as well I find myself in a position where I can't actually daytrade even if I wanted to - purely because the spreads are far too wide even with the most competitive dealers and i am normally jumping on the end of a breakout and losing commissions as well as my pre-determined risk:reward.

Do you think with the same investment over a one month period you can make more swing trading than day trading? This is the question I am curious to know the answer to. I have a proper trading account, thinkorswim, which I have yet to use given that the account currency is usd and it means I would have to generate at least 25pc return just to see my money back on the currency itself given the low GBP:USD rate. But I want to get involved further in day trading and it seems leveraged direct market access is the answer to pick up nice small profits throughout the day just trading normal technicals. Just curious to those who made the hop this way and any thoughts on it and whether just sticking to swing trading is best for me, just waiting for the VIX to lower?

 

[BSD]

Trading: Choppiest environment in 50 years !

That being the case I'd advocate hit and run daytrading for now, taking profits when you have them, going for singles, not homeruns, until the current choppiness is replaced again by more trendy markets.

 

[tomorton]

I agree that swing trading has become relatively unproductive - swing highs and lows are not being followed by extensions of the move, the market is reversing every 2 days. Also, the volatility is so high that if using, say, the low of a swing high to enter short and the high of the same bar as the stop, the daily ranges are so great that distance is really painful on r:r.

I have switched attention to a single intraday position per day, and this has been exceptionally profitable, partly because the daily volatility has been so high that intraday reversals are common and the daily range makes for a very good move if you get direction right. This uses the current characteristics of the market rather than fighting them. But only one position per day. Its all back to Sun T'su really.

 

[shadowninja]

Yes, definitely. It took me a month or two to realise this before I got back to daytrading/scalping, (having lost for quite a few days in a row, which is not normal for swing trading). I think the term is swing scalping (if you give a **** about terminology). Forex did trend for a few days but it's switched again.

 

[0007]

Hi All, Just some random musings I was having about why I think I am going wrong with my trading / spreadbetting.

The key driver my BAD trading currently is that markets are volatile so I am trying to trade a lot. Quite often when I don't see very strong technical patterns and much more of a momentum "punt" type trade based on my view of sentiment and any news I might see coming up on my various news feeds. Nothing unoriginal there then.

I do find however that actually I am trying to day trade when in fact I have normally and only ever been a swing trader. I spend most of my time licking wounds over multiple small losses day in day out as I continually get stopped out. Even after adjusting my positions to account for volatility with risk:reward of often 1:1 or less (I know, terrible, terrible trading!!) plus ensuring I was well hidden behind good solid support / resistance I still made losses and found myself in a situation of halting trading completely.

As more of a spreadbetter than a trader as well I find myself in a position where I can't actually daytrade even if I wanted to - purely because the spreads are far too wide even with the most competitive dealers and i am normally jumping on the end of a breakout and losing commissions as well as my pre-determined risk:reward.

Do you think with the same investment over a one month period you can make more swing trading than day trading? This is the question I am curious to know the answer to. I have a proper trading account, thinkorswim, which I have yet to use given that the account currency is usd and it means I would have to generate at least 25pc return just to see my money back on the currency itself given the low GBP:USD rate. But I want to get involved further in day trading and it seems leveraged direct market access is the answer to pick up nice small profits throughout the day just trading normal technicals. Just curious to those who made the hop this way and any thoughts on it and whether just sticking to swing trading is best for me, just waiting for the VIX to lower?

In my experience volatility is key to profits if you adjust your timeframe accordingly - ie to match the volatility cycle. In my case it seems that for now, a shorter swing is appropriate (ie more profitable overall). This is daytrade but not scalping.

 

[TomTom]

What we have had here is a pattern similar to 1997-1998.
Yes we are range bound.
Simply trade the ranges.
Remember trading every day is not a requirement of this business.
wait for the range to get broken then pounce or retrace, its not rocket sience, the simple things work so thats why i stick to them.

No more trading for me untill 2009 hapy xmas all