• Matt DeLong

Is swing trading the same as day trading?

Which is better — warmer weather or colder weather? The answer here is — it comes down to “preference”!


I can tell much more $$ in hedge funds/mutual funds are deployed over a longer term and more profits have been generated there over the past 50 years through traditional “investing”, not on a 1-minute intraday stock chart because they build positions of 10m+ shares over a period of a several months.


My story…

I started out day trading and after 6 months of consistently loosing $$ on various/popular strategies that stock gurus promote, like breakouts and the ORB (opening range breakout), I switched to swing trading, so you can probably anticipate my answer to your question, but my answer will also tell you where I have spent the majority of my time, so I have more experience swing trading.


I have friends on both sides who would argue their personal preference, but keep in mind, their preference is also where they spend the most of their time and also have the most experience.


In swing trading…

I typically hold 1–15 stocks over a few days to a few months. My main strategy that I’ve used is “trend following”.


I do my “market prep” work the night before and build a “csv file” with my tickers, buy/sell, #shares, route and STOP limit price, trigger Price & TIF. I review daily & weekly chart timeframes looking for my personal “trend following” criteria. I use a stock screener that reduces the scope of 7,500 stocks/etf’s to my exact criteria, so I reduce the size of stocks to review to only 5–50 stock charts a day.


I peek at QQQ, DIA & SPY to see how they closed to get an idea of the overall market to decide if I want to get aggressive or conservative with the # of open positions I want.

I enter the stock “setups” I like into my Google Drive spreadsheet to calculate my risk, # of shares and have inventory of my “watch list” and my open positions so I can remember my specific entry/stop & thoughts on a specific trade.


I use a risk management strategy known as “Trading an R” (risk unit). My trading friends and I can compare scores on a weekly/monthly basis — even though we have different size $$ in our accounts. Link > Real Life Trading (use same strategy swing trading, but risk a HIGHER amount). Essentially, I decide how much $$ I am willing to lose before placing a trade, assuming it may be 50/50 odds I win/lose, ultimately time will tell. I may deploy $50–100k on one trade, but only willing to “lose” $1k.


5–15 minutes AFTER the opening bell, I import my orders inside my DasTrader Pro software and push my orders live, the orders sit “open” waiting for my STOP limit orders to trigger. If they don’t trigger, I haven’t made (or lost) any money. Once they trigger, I’m in the trade and add a row inside my spreadsheet.


I am in front of a computer screen during market open — maybe 30 minutes a day. I was NOT glued to my screen like I was day trading.


In day trading…

I typically would hold stocks a few minutes to hours. My main strategy that I used was “gap & trap”. I look at the pre-market trading (before 9:30 market open) gap up / gap down lists. I typically short stocks that are gapping down (“earnings season” is great for this), and buy stocks that are gapping up. There are many other criteria I use, so “don’t try this at home”. I will typically trade both bullish and bearish intraday.


I do ZERO “market prep”, because I use pre-market trading to create my watchlist.

I review 5 & 15-minute charts and keep a live feed of QQQ & SPY open to get an idea of the overall market movements.


I do NOT watch CNBC and care much about what everyone else is doing — by the time you see it there, it’s too late. This was one of my newbie mistakes I made. I used to subscribe to a “news squawk” service and had intermittent success with that.


I enter the stock “setups” I like into my Google Drive spreadsheet to calculate my risk, # of shares and have inventory of my “watch list” and my open positions so I can remember my specific entry/stop & thoughts on a specific trade.


I use a risk management strategy known as “Trading an R” (risk unit). My trading friends and I can compare scores on a weekly/monthly basis — even though we have different size $$ in our accounts. Link > Real Life Trading (use same strategy swing trading, but risk a HIGHER amount). Essentially, I decide how much $$ I am willing to lose before placing a trade, assuming it may be 50/50 odds I win/lose, ultimately time will tell. I may deploy $50–100k on one trade, but only willing to “lose” $1,500.


I NEVER trade the market open — I manually place STOP limit orders around key pivot points/trends.


I typically had only 2–4 open positions — and closed EVERYTHING the same day. I used to “size in” and “size out” but it was a little too advanced/complex for me at the level I was at when I tried day trading back a few years ago.


I was literally GLUED to my screen from about 9a EST (30 mins before market open) until about 4:30p (30 minutes after market close). I would run to my kitchen to make a sandwich and come back to see all my profits had evaporated.


Any open positions would have a corresponding “STOP Market” order to exit the trade.



Summary…

At the end of the day, I think ONLY YOU can assess what fits your personality better between the 2 day/swing trade timeframes. Either way, the key to success is risk management and controlling your emotions. Yes, I tell people I “trade stocks”, but in reality, what I do is super simple — I execute my strategy. My strategy is complex and decides when to buy/sell stocks, which stocks to buy, what price to buy, when to lock in profits, when to take a loss, how many open positions to maintain, etc.


I say try both for several months and see what suits your personality best.

137 views0 comments