Day trading is definitely more profitable and safer than Swing / Position trading

[luckyd1976]

In one of his recent daily videos, John F Carter says the day trades pay the bills and the swing/position trades build the capital.

Exactly right on here.

I'm divided 50% LTerm (65ema/260sma and "FrontRunners") and 50% Income (DT Emini's and Monthly Cashflowing Option strategies) and frankly I wouldnt trade without both.

 

[Mathemagician]

Of course day trading is more profitable if you know what you are doing. It is too obvious. If I position trade and you day trade and we have 50% hit rate and 2:1 r:r ratio, for example, what makes a difference between our outcomes is how often we get to apply your edge, everything else being the same.

Everything else is not the same!

jj

P.S. FWIW, I both daytrade and position trade professionally so not bashing one or the other here.

 

[FXSCALPER2]

Everything else is not the same!

jj

P.S. FWIW, I both daytrade and position trade professionally so not bashing one or the other here.

It is a mathematical fact though, isn't it? If you have an edge, clearly you make money more quickly by trading more. After all, what is the difference between trading for five years and trading for two years? Time, of course, and therefore the number of trades taken. Why do casinos want to have as many people through the door as possible? Because they have the edge and they want to apply that edge as may times as possible. Also, the effect of compounding is much more pronounced if you do it more often.

 

[Mathemagician]

The situations that you are constructing favor daytrading. One can just as easily construct the situation so that long-term trading appears far superior to daytrading. This has little to do with the inherent profitability of one approach vs another or the mathematical facts. Regardless, I'm not going to get into a "thing" here with you as you seem to be getting pretty fired up about this and for me it's hard to think of a less important issue. I'm just gonna keep doing my thing and encourage you to do yours.

Happy Trading!
jj

 

[nine]

This is an argument that appeals to ones inbuilt (and perhaps poorly examined) beliefs.

A strong opinion either way is probably really a prejudice.

Neither day trading nor longer term trading is inherently safer.
- in both cases you can scale your risk to the actual and potential volatility of the markets
- in both cases you can get black swan events that are outside of the potential volatility you anticipate and thus incur larger losses (gains) than predicted.

Arguments about building capital with long term vs short term are also just personal preferences. In either case you can scale positions or position size. It works in both.

Day trading has advantages like the number of times you can take a risk per unit time which should give higher profitability for a given size account. With rare exceptions though they don't seem to because of: scaling issues as one gets bigger on short term which increase slippage and make it difficult to get a position, psychological issues that are more prevalent as decision making time gets shorter, etc.

And so on and so forth. But then, why get in the way of a good argument with rational thought. I borrowed this from a pm I got on another site

The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief.
That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing.
So what do you do? Agree to disagree. Or fight. - C. Zakalwe.

 

[darktone]

This is an argument that appeals to ones inbuilt (and perhaps poorly examined) beliefs.

A strong opinion either way is probably really a prejudice.

Neither day trading nor longer term trading is inherently safer.
- in both cases you can scale your risk to the actual and potential volatility of the markets
- in both cases you can get black swan events that are outside of the potential volatility you anticipate and thus incur larger losses (gains) than predicted.

Arguments about building capital with long term vs short term are also just personal preferences. In either case you can scale positions or position size. It works in both.

Day trading has advantages like the number of times you can take a risk per unit time which should give higher profitability for a given size account. With rare exceptions though they don't seem to because of: scaling issues as one gets bigger on short term which increase slippage and make it difficult to get a position, psychological issues that are more prevalent as decision making time gets shorter, etc.

And so on and so forth. But then, why get in the way of a good argument with rational thought. I borrowed this from a pm I got on another site

The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief.
That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing.
So what do you do? Agree to disagree. Or fight. - C. Zakalwe.

Understood, but!. Most position players take on larger stops (pip wise) than average joe daytrader, so from that standpoint i can understand the daytraders view also that by n large the aim is to keep risk small and grab it while you got it. but, the downsides are screen time / emotional burden / usually,playing a set session time / not benefiting (as much at least) from overall trend!..

The position trader in general relys on overall trend, could almost say 'delegates' profit potential to trend, it frees up time! The downsides are markets dont always trend, entries lack precision (due to not being at the screen), profits (% wise) diluted due to entry risk.

My view is, aim to enter in the direction of trend (earlier the better!), use daytrader size and entry style, get yourself to a BE situation asap! To me that = far less screen time (what more valuable thing do we have than time!?), HUGE potential RR.

 

[sigboyd]

Day Trading

Hi there - just a couple of observations: there are various and sometimes quite diverse situations/parameters whch will affect an approach.E.g. Is one starting out with £500? Is this amount actually risk free financially and psychologically, is one self-employed or acting on others behalf and managing large funds - sometimes 1£billion minimum - this as an hedge fund requires an universal approach and has expectations from the client.If you work for yourself the time envelopes and market activity are more within your own ambit.
Life style or life quality is relevant.
I trade between 06.30 to 11.00 G.M.T. primarily on the G.B.P/U.S.D I piggy back a trend for 26 pips and get out,if indicators are not in agreement just do not trade - there is always tomorrow morning - hopefully!
Best regards

Hi,

I think Day trading is definitely more profitable than Swing / Position trading provided the following are true.

(1) The trader is equally adept in Day / Swing / Position trading.
(2) The same level of risk is taken.
(3) While day-trading the trader does not overtrade.
(4) The trader only takes high probablity and low risk trades with a high winning ratio and average profit to loss ratio. This calls for patience and generates less trades.
(5) Average trade profit is high (i.e. slippage does'nt eat most of the profits).
(6) Funds 50k - 1 million

The reason why I think Day trading is better than Swing / Postion trading in the above circumstances are as follows.

(1) You avoid risk of overnight exposure.
(2) Can take advantage of leverage.
(3) Compond profits more quickly
(4) Overall exposure is much less reducing risk to your account.

Do you agree or disagree ?

 

[charliechan]

Hi,
(1) You avoid risk of overnight exposure. -what about the opportunity missed if it moves in your favour?

(2) Can take advantage of leverage. - you can do this if holding overnight also
(3) Compond profits more quickly - really? this is ability related, not method imo.
(4) Overall exposure is much less reducing risk to your account.- as rhody pointed out.

Do you agree or disagree ?

yep!

 

[RogerTheTrader]

Hi,

I think Day trading is definitely more profitable than Swing / Position trading

Do you agree or disagree ?

It's a moot argument. Trading style is a personal choice. Day-trading is a lifestyle. You're glued to a screen. If you don't trade the right instrument, drawdowns are inevitable.

Swing/Position trading allows for trades to develop, potentially reaping higher profits.

I trade Options on US Equities and Indexes and prefer spread trading. The only guarantee in the stock market is that options will lose money every day through time decay. I focus on selling options.

With the extreme volatility of the US markets, directional trading by day, swing or position has been a rough road. I've done them all, but have made the most money with spreads.

The bottom line is, What works for YOU? What trading style fits YOUR personality? What is YOUR risk tolerance? What is YOUR edge? What is YOUR weakness?

Once you've selected the direction YOU want to take, is it producing favorable results?

What the next bloke is doing is meaningless to YOUR account balance.

Keep your risk low and your profits high!

Blog: "I'm a Great Trader!"

 

[rathcoole_exile]

Roger, nice to see someone in Nevada using the word "bloke" !!

 

[fcmisc]

IMO, it's easier to get good at day trading, and make consistent profits.

However, such strategies are often quite hard to scale. 10-20k a day isn't unrealistic for a good day trader with luck on his side. But there aren't many who can push that to 100-200k a day.

 

[Splitlink]

Last night gave an example as to what can happen in overnight trading. As long as you are prepared for these sort of things--- OK! But a nasty surprise for a lot of short traders on Footsie and one of the reasons that I prefer day trading.

I have not checked as to why that happened, but it did. Curiously, it was not a flash spike as they, often, are but took an hour to develope.

Split

 

[Lee Shepherd]

Hahaha..hi ya splitlink, I take it you use finspreads judging by your graph provider, what are these spikes that people keep going on about...It's becoming a joke...its the same thing all the time and has been for years...oh..the market just spiked but only on my platform...could you find the time to post just one example on graph of a spike that so often occurs so I and others could look.

Thanks.

On the footsie it wouldn't have been a nasty surprise if you were long....

Last night gave an example as to what can happen in overnight trading. As long as you are prepared for these sort of things--- OK! But a nasty surprise for a lot of short traders on Footsie and one of the reasons that I prefer day trading.

I have not checked as to why that happened, but it did. Curiously, it was not a flash spike as they, often, are but took an hour to develope.

Split

 

[Splitlink]

Hahaha..hi ya splitlink, I take it you use finspreads judging by your graph provider, what are these spikes that people keep going on about...It's becoming a joke...its the same thing all the time and has been for years...oh..the market just spiked but only on my platform...could you find the time to post just one example on graph of a spike that so often occurs so I and others could look.

Thanks.

On the footsie it wouldn't have been a nasty surprise if you were long....

No, I don't go looking for spikes to prove my point which is, it doesn't matter what it is, or what caused it. It happened. I have traded overnight and follow Barjon's Swing Trading thread but have come to the opinion that I prefer to be out of the market before the close unless I,already, have made a good profit on my day trade and am willing to take a chance.

But chance, it is, IMO.

Looking at that chart. It isn't finished yet, it's only Saturday morning!

Who's going to forecast how that will open on Monday? How is he going to arrive at his conclusion, by calculated TA analysis or pure guesswork? How is the happy long trader going to feel if it goes the other way before he can get out?

Split

 

[Trader333]

I think it may have been caused by news in the US and all SB companies give a quote for FTSE out of hours based on what other indices are doing.


Paul

 

[Splitlink]

I think it may have been caused by news in the US and all SB companies give a quote for FTSE out of hours based on what other indices are doing.


Paul

News does terrible things to overnight traders, Paul!

Some time ago, I had an overnight trade on the Daily Mail Trust---DMGT. It was decided overnight that the company was not going to sell its free press arm. The shares opened with a crash the next morning!

I would not be surprised to see Footsie open with a stop seeking crash on Monday, only to pop back up again within a short space of time. Neither would I be surprised to see it not happen.

I prefer to be watching, then, rather than sweating through my Sunday church sermon.

I have come to the conclusion that God is not a capitalist, as so many Americans believe.

Split

 

[grantx]

Split,

What time period is used here - 5 minute, 15 minute?

Grant.

 

[hornblower]

Last night gave an example as to what can happen in overnight trading. As long as you are prepared for these sort of things--- OK! But a nasty surprise for a lot of short traders on Footsie and one of the reasons that I prefer day trading.

I have not checked as to why that happened, but it did. Curiously, it was not a flash spike as they, often, are but took an hour to develope.

Split

If it gets a bit higher on Monday
I will be able to short it again
made a lot of points over the last few week doing this

 

[Lee Shepherd]

Splitlink,

Could you explain to me what the ftse 100 has in correlation to the ftse 100 futures and do these two effect one another...?

Do you have the ftse 100 closing price and ftse 100 futures closing price?

Thanks.

 

[fcmisc]

Splitlink,

Could you explain to me what the ftse 100 has in correlation to the ftse 100 futures and do these two effect one another...?

Do you have the ftse 100 closing price and ftse 100 futures closing price?

Thanks.

FTSE futures price is the cash price plus cost of carry (expected dividends and interest cost of a hedge). It's theoretically arbitrage free. You won't be able to arb between the cash and futures bets as there's an overnight carry cost.

Actually, I lie. Once in a blue moon, they'll type the cost of carry number in their model a bit wrong, and then there'll be an arb.

Anyway, regarding the big overnight move, as Trader333 says it's down to moves in other products. I had a look at some sites last night, and if I recall correctly the spread is 10 points. If someone paid me sufficiently, I'd be more than willing to quote a 10 point spread in ftse all night. All you need is to know the correlation of the ftse against the ES. To know the approximate range of movement. And to then use an autospreader to quote the price.

Good luck!