Swing or Position What's the Difference?

[badd boi]

Hi I am a newbie(still a virgin - trading that is!), so haven't traded yet.

Please could some one please explain the difference
between SWING & POSITION TRADING.
Is it a question of timing(we are still talking about trading here!)

Thanks,
Badd Boi(bad, bad Badd Boi !!)

 

[anley]

Hiya BB

Swing trading is a clever marketing term invested by brokers/system sellers and book authors to give the illusion that people can make excellent money by catching all/most the 2-10 moves up and down in a market.

For example, say the FTSE is at 4000, it moves to 4100, then down to 4050 then up to 4200 then down to 4100 then up to 4350 then down to 4250 etc etc.

The swing traded would attempt to buy then sell short, then buy, then sell short, then buy, then sell short so profiting from all the 'swings'.

A position trader however would just buy at 4000 (on the assumption that the market was going higher) and sit through all the swings on the assumption say that he's be selling at 4500.

OK, I'm being a bit cheeky in describing swing trading but I'm not that far wrong from the truth either!

 

[badd boi]

Hiya BB

Swing trading is a clever marketing term invested by brokers/system sellers and book authors to give the illusion that people can make excellent money by catching all/most the 2-10 moves up and down in a market.

For example, say the FTSE is at 4000, it moves to 4100, then down to 4050 then up to 4200 then down to 4100 then up to 4350 then down to 4250 etc etc.

The swing traded would attempt to buy then sell short, then buy, then sell short, then buy, then sell short so profiting from all the 'swings'.

Hi Anley,
In what time-frame does this usually take place, intra day, daily, weekly or monthly in your example?

A position trader however would just buy at 4000 (on the assumption that the market was going higher) and sit through all the swings on the assumption say that he's be selling at 4500.

Again, what time period are you talking about?.

Sorry to be so dense on this matter.

Do you know of any books on Swing / Position Trading.
I know about Marc Rivaland's on Swing Trading.

Thanks,
Badd Boi

 

[tips]

Hi Baddboi,

Generally Swing Trading is done on a Daily/15mins chart and can last from 2 days upto a week, I.E. as long as the trend is moving your way..As soon as you find the trend going in the opposite direction you close the trade and try to look for getting in the opposite direction now I.E again if you find a good entry point. Swing trading is very famous among traders as one can capture most of the profits of the market momentum.

As for Position trader, a single trade can go from a few weeks to even a couple of months I.e, again if the overall trend is moving in the correct direction. Position traders have less interest on daily moves therefore their aim is to try to capture profits on the whole, I would rate it as much safer strategy as long as you know your stuff... Once the trade starts moving your way, you use trail stops to capture profits, Position traders look at daily/weekly charts to look for a change of the overall trend.

If you are just starting out to trade, I would say first you require have a good knowledge of the Technical Analysis....which can surely help with your Swing trading., infact Swing Trading is very much based on the TA. Hope this helps...

 

[badd boi]

Hi Tips,

Thanks for the help, it's very much appreciated.

Yes, I couldn't agree more about the TECHNICAL ANALYSIS, it's crucial I feel, for me.

Do you generally SPREAD BET, trade FUTURES / OPTIONS or use CFD's,
when you SWING or POSITION Trade?
What's the safest for a newbie?

Thanks,
Badd Boi

 

[andrewmooton]

Would anyone like to give their opinion on what technical analysis is good for swing trading?

Tips, do you agree with anley that swing trading is just a marketing ploy?

 

[Rainmaker]

Take a look at the Marc Rivilland book on the subject - it's pretty good.

 

[TheBramble]

Would anyone like to give their opinion on what technical analysis is good for swing trading?

Certainly.

While the trend is up - be long.

While the trend is down - be short.

If you're not sure what the trend is - get out or stay out.

Only be in one of those trades at any one time.

You think I'm kidding?

It really is that simple.

That'll be £999 with a t2w discount of, well 100% actually.

 

[oatman]

Just let me know when there's a trend, not after :cheesy:

 

[andrewmooton]

but how can you know if its acually trending and not just moving up and down 'erraticaly' for want of a better word?

 

[trendie]

Doesnt the adx indicator show a propensity to trend ?

I use "Adaptive Moving Averages" - they go "flat-line" when the market is in a range.
I use trend-following rules when the lines are moving.
I use oscillator rules to scalp when the lines are flat !!

 

[anley]

Swing trade 2-10 days

Position trades 2-100 weeks

Although there are no real set rules

 

[badd boi]

Take a look at the Marc Rivilland book on the subject - it's pretty good.

Hi Rainmaker thanks for the reply.
Yea I here it's a really good book
Does it cover Position Trading too?
Badd Boi

 

[badd boi]

Swing trade 2-10 days

Position trades 2-100 weeks

Although there are no real set rules

Hi Anley,
Don't you mean 2 - 10 weeks?

Hi Tips,

Thanks for the help, it's very much appreciated.

Yes, I couldn't agree more about the TECHNICAL ANALYSIS, it's crucial I feel, for me.

Do you generally SPREAD BET, trade FUTURES / OPTIONS or use CFD's,
when you SWING or POSITION Trade?

What's the safest for a newbie?

Thanks,
Badd Boi

What about my previous question on this thread (see above) to do with the type vehicle you'd use to make these trades?
As I am unsure which one to use and which would be the safest for a beginner.
No I don't mean what sort of car you drive or what's the safest Anley!
Or can anybody please help!
Thanks
Badd Boi

 

[techst]

Hi Bad,
Im a swinger and I use CFD's for my trades. The trades i can put on last between a few days and a few weeks. It's nice to see so my textbook style definitions of what a swing and position trader is and does.
Is there any others that are swing and position traders about this thread? Any other questions Badd Boi?
Thanks for reading

 

[Rainmaker]

Badd Boi

Not really - but it touches on dow theory, which is quite useful.

 

[badd boi]

Hi Techst@,
Thanks for your reply.
Please can you tell me how do you keep positions open.
Say you were Spread betting over a couple of weeks /months.
Do you have too roll the bet over every day , manually, or is this done automatically by the system?
Is is not expensive to hold positions open for weeks/months?
Do you need to use Margin for this.
Also, some people say that you should not hold a position open overnight in case the market gaps.
I'm totally confused.
Help! Anybody
Badd Boi

 

[badd boi]

Badd Boi

Not really - but it touches on dow theory, which is quite useful.

Sorry Rainmaker I seem to have my silly head on today.
Don't understand to what you referring.
Please can you back up and elaborate.
PS: It's pissing down here - really bouncing!.
Were you out dancing last night?
Badd Boi

 

[techst]

hi Badd, I dont spread bet. I use Contracts for Difference, which is more like buying the shares themselves than spread betting. I dont have to roll any bets over, and i can go short too. I pay no commission and the interest i pay on the margin isn't that high. It may cost me £1-3 per day in interest to keep a trade on, but that depends on my position size. If your day trading then taking trades over night may not be a good idea for a beginner.But day trading isn't the same as swing or position. But it all depends on what sort of time you have to commit to this pursuit, If you still have a normal day job then swing or position trading may appeal to you.

 

[badd boi]

Hi Techst@,
Thanks for your reply.
I had assumed that you had gone from SB too CFD'S, rather than straight too CFD'S.
The costs soon mount up if you have a position open for a few months, @ £1-3 /day.
I fancy either SWING or POSITION Trading, rather than DAY Trading as I think
Day Trading would be too hectic for a beginner.
You really surprised me that too keep a position open cost so much.
No one had ever stated the costs to me before.
You would need to have a very good position open to make it pay.
Badd Boi