Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

Learn How To Day And Swing Trade Using Stochastic, MACD, Bollinger Bands Like A Pro

Swing Trading vs Day Trading

When one is swing trading, one is a swing trader. A swing trader
who is day trading will wear the hat of a day trader during the
day trading session.

Day trading and swing trading are two
different functions. I can scalping, swing and position trade.

However, when I am day trading, I am a day trader. And I know
that. A technical trader may just be a day trader. In that instance,
he is just a day trader. 

Therefore, he or she should leave swing trading
to others. Other swing traders could not day trade, and they do not
even attempt to do so because they are intrinsically swing traders.

Now the question is what is swing trading vs day trading?

At the end of this article, one will be able to differentiate swing trading
from day trading, and ultimately discover if one is a day or swing trader
or both.

Day Trading Explained

Day trading is about profiting from short term market fluctuations that derive from the medium term trends. I am choosing my words carefully. I said, short term trends that are forming the medium term trends. 

A day trader who is only day trading short term price fluctuations that have nothing to do with the medium ones is speculating.

In fact, he or she is scalping trade like a gambler. This is critical because a day trader is working for swing traders, but at the same time eating in their plates.

A very good day trader is connecting the dots between the short and medium term trends. As he or she pays attention to that, he or she will achieve consistent winning trades. 

Consistent winning day trades do not always mean a profitable day trading account. It means one is having more winning day trades
than negative ones. 

To have a profitable day trading account involves the 5% money management, selective risk-ratio and trades management from the entry to exit of the trade.

A day trader is also a momentum trader. I have seen some TSTW 24 day traders who were day trading financial instruments that are not moving one bit. It is a mistake. 

A day trader must align with the trend and allow both the momentum and volatility (fuel of the price-action) to carry the trade to the target price level without too much delays (within one hour or so).

A day trader is also closing all day trading positions before the closing bell. Therefore, he or she is actively managing the day trades while keeping eyes on the clock.

A day trader is an active market participant who is diligently hunting down the best ready made day trading signals that will generate a profit before the markets close. He is always prepared, and only trades his setups that he or she has mastered. 

Contrary to a swing trader who leaves positions open for few days, a day trader is constantly securing or banking profits and slashing losses before it is too late.

To become a very good day trader, one must understand how both scalping traders and swing traders operate in the financial markets. If a day trader ignore the scalping traders, he may sustain losses in many occasions even if the initial decision is correct. 

A smart day trader uses the swing trade signals as excellent day trading
setups. All in all, the scalping traders are working for day traders while eating in their plates (confiscating sometimes day traders' profit). 

A day trader ought to work harmoniously for swing traders while nicking
a bit of their profit. It is fair and legal, Call it trading competition.

Swing Trading Explained

Swing trading is really about helping position traders from one key level to the next until the price reaches the position traders' ultimate target.

See it as a train that leaves station A to F. In between those two terminals (entry A and exit F of position traders), there are other stations B, C and D and E.

The swing trader is swinging it from A to B pause, B to C pause (exit), C to D pause, D to E pause (exit) and D to F (final exit).

When the price reaches the position traders' ultimate price target F, a swing trade may initiate the opposite trade at the convergent hot spot swing trading zone where the position traders are exiting their positions for good.

A swing trader is a medium term term market participant in comparison to position traders. Like a swing trader is a long term trader to a day trader so is a position trader to a swing trader.

The best time frame for swing trading setups is the monthly chart.

Swing traders hold positions for more than one day, and let the position in place throughout weekends and bank holidays. 

Typically, swing traders enter their trade on Tuesday and exit it either on Thursday or first thing Friday morning if they do not want to risk it throughout the weekend.

Nevertheless, a swing trader who catches a home run price move may manage the position for a week or more by 
adopting a very defensive trade management attitude.

Good swing traders always combine the technical trading with the fundamental analysis to avoid nasty surprises that come with speculative swing trading. In the past, swing traders were traditional chart patterns traders, but also fundamental market participants.

Today, most swing traders are more  of technical traders, while the position traders become highly sophisticated market players that swing traders can not ignore.

To become a better swing trader, one must understand why swing trading at the first place.

Conclusion

Swing and day traders are the two most active market players who compete with each other at every level.
It is essential that each group understands what the other is up to.

Considering that the short term trends form the mediums, and mediums the long ones, it is vital that a swing trader does not ignore day and position traders. At the same time, a day trader can not afford
to disregard both the scalping and swing traders.

It is equally challenging to be a day or swing trader, but if one can not manage day trades during few hours as a day trader during London or New York day trading session, how could one safely leave a
position open for more than one day or week as a swing trader.

Some would say day trading is more complex and challenging, other will convince themselves that swing trading is easier. 

One question still remains 
what will be the final score for swing trading vs day trading?

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Well, soon I will be back posting about swing trading a reversal like a professional swing trader.  Stay tuned.




This article is written by George Beaulieu.