Day trading or positional/longer term trades?

[peteuk]

As a die-hard day trader scalping pips wherever I can and not doing so bad, I was looking at a longer term chart the other day and wondered why I wasn't opening and keeping positions for longer than a few hours. Looking at Swissy on a daily chart for instance, if I'd bought on June 17th at around 1.3150 (when the 3 and 7 ema's crossed and ADX confirmed the long), and then closed when the ema's crossed back on 18th July (roughly a month later) at 1.3611...well that would have been...er....461 pips and only one trade, one spread, and not having to watch charts every day for hours on end.

So, what's the down side? There has to be one hasn't there? Anyone here trade longer term? Bigger stops maybe, bigger margin, riskier? It looks ok to me, but then I'm only a day trader.

Cheers
Pete

[rek3]

I was wondering the same thing. As a novice trader I still have yet to determine my style. One draw back might be the intrest charged daily for holding the trade.

My first post. Hope it was short but sweet.

[smclen]

I was thinking the exact same thing last week. FX markets are renowned for trending, yet the majority still lose money. Is it because they trade over too short a timespan? Perhaps, but trading EOD or greater removes much of the noise associated with the FX market. The negatives would be bigger stops, interest (unless long position with the required margin). You would also need a bigger account to keep your stops within the desired % risk on each trade.

It would be nice to adopt a set and forget strategy towards FX, but I have actually heard of anyone doing this before. At the end of the day it doesn't really matter so long as one is profitable. Comments anyone??

[buff]

Guys,

Interesting topic. Like a lot of you probably have, I have been having a look at various systems and certainly various time frames - everything from 5 mins to 1 hour. There are plenty of good ideas out there and profits to be made, however the results are inconsistent and the stress levels were tending to cause me some grief.
I originally got into Forex with the idea of not having to sit in front of my computer all day and make enough to pay the bills. Now living in Oz, our best time to trade is between 3pm and 3am which doesn't go down well with the wife and kids.
Now late last week, I was thinking about this when I thought about my futures trading days and how I use to trade of the end of day data (daily charts) which would give me my order for the following day if the set up was there. I then went back to my old system and did a quick backtest on a few currency pairs and to my surprise, it appeared to have some merit. This was looking at the daily charts only.
The only disadvantage I can see, is the rather large stops, however these can easily be negated by the very large profits. Another advantqage of having larger stops, it may keep you out of the range of the so-called stop hunters (?). The stops look as though they will be around anywhere from about 80 to 200 pts away. Sounds scary but working with minis you could easily keep within your money management rules.
Any way, food for thought at the moment. I will have a closer look at it this week and get back to you if it shows any real promise. Cheers.

Buff

[Wallace]

Hi All, if you don’t mind and haven’t already read them, I’ll direct you to 2 of my previous posts regarding this topic:

http://www.moneytec.com/forums/_show...474cf051994264
and

http://www.moneytec.com/forums/_show...474cf051994264

The key of course to DaytoDays trading as with any other timeframe is waiting for and finding the optimum entry point, when the price is beginning a new Wave/swing/pivot.

Where D2Ds trading possibly fails is for example the May/June topping of the EUR/USD, one has to drop to an Hourly or smaller timeframe to trade, or stand aside.

Interest charges aren’t something to be concerned about, I believe they’re tax deductible in most countries.

And yes, initially one has to have a larger margin to begin the trade; however once the trade has progressed, one can always add lots/mini lots to the position. Wallace.

[ig1001]

Peteuk, before I started trading (4 months ago) I struggled with the same question -- I would exit a trade with 10 pips profit and watch the position become more valuable ... and I would kick myself.

So, for about 2 weeks I abandoned my day trading strategy and went for position trading (bigger profits). Well, my only reason for going for more pips was my greed. I was a good day trader but a horrible position (longer term) trader. 2 weeks into my experiment I went back to my strength -- in day trading -- and I've been happy ever since with 10 pips a day or so.

I think it's natural to want to get more out of each trade -- but my advice would be to put a lot of practice into the longer term trades if you want to go that direction. The downside on the longer term trades is that you have to read the longer term trend in the market, which I find much harder than reading the day's range. If you're consistently wrong on the longer term trend, you can lose a lot of money very fast -- because on the longer term trades you're probably going to set wider stops.

Also, if you want to make more money on day trading, why don't you practice with moving your stops and limits? If you make 10 pips, then set your stop so you can't make less than 5 pips, and reset your limit to try and make 15 or 20? And then move it from there. That requires a lot of babysitting of the trade, which I have no patience for -- but it would give you the opportunity to move with the market.

In short, I'm great at finding today's range and horrible at finding the weekly/monthly trend. So I stick to what works for me. I suggest you find what works for you and really become an expert at it -- and remember to be happy with the profits you're making. Don't let what you don't have spoil what you do have.

[Wallace]

Hi All again, just received this notice from Elite Trader in case you might be interested. Wallace.

Next Chat Session: Using Multiple Time Frames – Thursday, August 7th @ 4:30PM EST

Most traders are so busy looking at their one-minute and five-minute charts that they neglect the big picture. Even those that do look at bigger timeframes tend to do it in the wrong way, costing them money and opportunities every day. In our next chat session, TradingFromMainStreet.com co-founder Brandon Fredrickson will show you how to pull larger gains out of your trades by using multiple time frames, while consistently taking less risk to do this.

The hour-long chat will take place on Thursday, August 7th at 4:30PM EST.

See you there! Baron Robertson. Administrator, Elite Trader - The #1 Site for Active Traders
You can enter the chat room at any time by going to the ‘chat introduction page’ and clicking on the words ‘Log In Now’.
In case you won't be able to attend, a link to the log of the chat can be found on the ‘home page’ shortly after the session has finished. You can also check out the logs of previous chat sessions.
If you have trouble logging in, please let us know at support@elitetrader.com. Be sure you mention the type and version of your web browser and operating system.

[Truville]

I have had simply ZERO luck with the day trades, and consequently trade only on the day charts. 5 min, and even hourly charts, have given me nothing but ulcers.

Instead, I use a system that highly qualifies trades on the daily chart. I’ve made profits as high as 450 over the course of a week, to as little as 7 pips in a day. The catch? I trade maybe 4 times a month.

As far as interest, that isn’t a big concern. Interest has never substantially cut into my profit.

Yes, the draw down can be substantial. I’ve been down 140 pips in a day.

So if you can trade smaller charts, I envy you. But bigger isn’t bad either.