By the way, it is interesting how you draw your fibbo lines. Here's a chart I made trying to mirror your 13m45s chart? This is 14 mins or so. When I see a range like that, I draw from the large peak to large bottom. Were you focusing on just that small range between 11250 and 11300?
So, I was asked for my opinion, and I'll give it. Hopefully I won't piss off any clients. Don't ask me to prove anything or post data because I won't. Paying clients get that. Maybe my experiences and thoughts will provoke a spark of creativity or help somehow. I'm almost certainly not going to answer your follow up questions, because most of you are too lazy to do your own research and testing. I scalped and day traded for several years before I gave swing trading a shot. Scalping in the Pit I had about a half second time advantage and the early days of electronic trading were glorious for scalping and day trading on a screen. I did my first swing trades by simply buying calls or puts - I was willing to pay the theta vig just to know my downside. I don't really think that day trading was necessarily a "positive" in terms of swing trading competency. 1. The most important factor in swing trading is comfort. It will work against you if you are in a constant state of anxiety carrying an open position. You can buy a put or call as I mentioned above, or you can trade a futures spread which are very cheap to margin, or you can trade a micro futures contract or trade a minimum block of equity shares - say 100 shares of SPY for example. Point being, you must start with the smallest denomination of risk available to you. It is super easy to lever the piss out of a trade when you get momentum and confidence and some solid positive account equity going. It is debilitating to create a giant hole starting out, so heed my heartfelt advice. 2. So what I'm about to say is going to offend most of you, so tough titties. I'm just going to say it and I won't bother replying to your dismissive responses. March and April of 2020 are recent examples of why I'm about to say what I'm gonna say. But there are hundreds of examples over the past twenty years that illustrate why I'm about to shit on TA being used either incorrectly or not to the effect intended by the user. Most every client that I work with comes to me using TA incorrectly. They don't understand the math behind the indicator and they don't appreciate that there are basically three species of technical indicators and that the entire indicator catalog in their charting package is a derivation of one of the three. You've been warned. Model long timeframe data. Don't bother with smaller timeframes. And for the purposes of legit Swing Trading the term minutes doesn't really help much. Never use cycles or wave count indicators. Overbought and Oversold indicators can be used only for confirmation. Bands or channels are acceptable for confirmation only. Pivots and other Support and Resistance levels are acceptable for confirmation only. Avoid using the same types of indicators in duplicate. For example, an RSI and a Slow Stochastic are two types of oscillators. Using many indicators does not necessarily improve a trading system (see Occam's Razor). For example, if daily price fails on a Monthly R1 Pivot, and the short term MA crosses below a longer term MA - that's good enough in my book to take a sell entry. (I just made that up out of thin air for illustrative purposes - you've been warned ) 3. "Swings" are typically previous highs and lows that are fairly obvious looking at established price action. Everything is an "on-the-run" snapshot. 4. Use already established trading range swing highs and swing lows for the purposes of setting your targets and risk management. Some traders use Fibo or Regressions - there's not a convincing argument for any of them predicting the future. Point being, you are not predicting the future, you are taking the smartest risk versus reward bets you can muster. 5. When you take a profit, the market will almost certainly keep running. Do NOT fall into the trap of second guessing that. You take your piece out of the market, and then look for the next opportunity. 6. The volatility and trading range of the instrument(s) you are watching dictates the position holding times and your profit and loss levels. You might hold a Eurodollar future for six months, and you might hold an Unleaded Gasoline future for six days. You get the point. If you are risk averse, choose a slow mover. If you want it more spicy, go find a wild one. 7. I am personally a big proponent of setting both the profit target and the stop loss at the time of trade entry. I personally use Good-to-Cancelled (GTC) One-Cancels-the-Other (OCO) stop limit orders (for example, pay up to five tics) for exchange supported futures spreads. 8. Once you've developed a profitable, consistent trading system - anything discretionary you do to it will destroy it. 9. Item (7) will make or break you. Position management makes or breaks traders. Discretionary risk management blows traders out. Your discretion is really fear masquerading as your ego. I prefer swing trading because it is not affected by modern algos, bots, and HF chicanery like day trading is. And if you have done any serious day trading or scalping you know firsthand how slippage and brokerage/commissions/fees eats at you like a giant parasite. And this is strictly my own personal opinion - swing trading is easier to learn and be good at as compared to day trading. Again, that is just my own personal opinion based upon quite a bit of independent and fund trading and work with hundreds of clients in my background. It wasn't that way twenty years ago, but times have changed. I also think that you can develop some art and tradecraft with swing trading that gets lost or minimized in the turbulence of high speed automation. Now, if you've automated a day trading system and you are profitable with it consistently over a protracted period of time - I will be the first to call you a boss and by all means keep it up. Ignore me, or if you are like some of my clients take up swing trading as a side hustle. If you have automated a trading system and can code your own shit and you have a decent ECN then you just be you. But if you are sitting on a $5K account with a mouse in your hand eyes glued to a screen trying to manually scalp modern electronic markets - you have my sympathies and now you know how I feel about your chances
@bone You know, the more you do that to your face, the better the chance there will be that it stays that way. Good write-up, you crack-spread ho.
Thanks all, based on what I've read here and my own preferred style, I have decided to focus on swing trading for now, and as suggested have a small amount for day trading when I'm bored @easymon1 That MitchRay video is awesome, learnt a few new things about fib. I've been using the fib retracement to find bounce play targets, but never thought to use it for trend continuation targets. I was using the trend based fib extensions for that - have you tried both? If so, why one over the other? The harmonics tool looks very interesting too, but I can't seem to find that on TradingView, any idea if it can be made available on there? In terms what what resources I follow, there are a few. Chris Dunn on Youtube and their trading course @ skillincubator is what got me started on trading, but don't follow him much anymore, I find his stuff is a bit too general now. For crypto specific news and education, I follow CryptoLark, Anthony Pompliano and BoxMining. For trading education, I follow ChartGuys and TradingWithRayner, and now I'll add MitchRay to it And then a whole bunch of people on Twitter as well. @SunTrader @Tradex Would you not use the 1HR for the broader picture analysis? E.g. if it's in a 1HR downtrend, I would be more hesitant to enter into a long position on the 5/15min? Or do you think that's not important? @bone appreciate that man, you've helped me decide to focus on swing trading instead, I'm all for less stress . And a good reminder to actually back test my strategies consistently, I've previously only tested them live in the markets inconsistently...wanting to jump in first. So yeah, good reminder to devise, test, and stick to my strategy.
Oh, we know your plan, @bone. We know which side of the day/spread trading war you are on. You side with the cylons who are spread-traded out across the galaxy. Which is smart. Not like the dumb humans who stick to cloistered day-trades, hehe.