Swing Trading and Day Trading

Swing Trading And Intraday Trading – First Steps

I posted an article two week ago about the major difference between Swing Trading and Intraday Trading and got some very positive feedback. I received several emails asking me to provide some information on the topic for those traders who are just starting out and are looking to start either swing trading and intraday trading or one or the other.

Many traders start out without completely understanding the emotional side of these two trading styles and as a result many traders who begin and have a very good chance of ultimately becoming profitable don’t realize their full potential because they didn’t put together a short plan to help them get through the difficult parts.

One thing I will mention and this goes for both swing traders and day traders and I mentioned it before in my earlier article, you cannot learn how to trade without actually going through the process with real money. The key is to start really small and work your way up from there.

Learn Swing Trading First

Here is what I believe is the best way to get your feet wet. If you are interested in intraday trading instead of swing trading that’s great, but before you become a great day trader you have to become a great swing trader.

Day trading is like swing trading on steroids or a fast forward experience of swing trading. So before you begin you need to make sure you can play the game in slow motion.

Swing trading gives you this ability so I strongly suggest that the first thing you do is master swing trading before ever remotely thinking of day trading or intraday trading.

Learn To Walk Before You Run

Once you begin to understand how markets work and how to read basic indicators such as TICK and TRIN as well as a hand full of others, you will begin to gain a different view of the markets and how they behave at different times of day. The only way to learn this is by watching the market in real time.

This brings me to my next point; before you start trading or even paper trading, spend a few weeks watching the markets especially during different parts of the day.

First spend a few days watching the pre open and the opening bell and see how the volatility quickly rises and begins to fall off. You will hopefully start seeing patters develop.

Next, how the market goes into lunch time and out of lunch time and how the volume flows in and out of the market and more importantly how your indicators react to the increase and decrease in volatility. Lastly, monitor the market as it goes into the closing bell and notice how stocks that have earnings or other news announcements always react quickly as the closing bell approaches.

Unfortunately, there is no way to learn any of this other than by watching the markets and monitoring your indicators to see how they react and more importantly what happens when your indicators are in conflict with each other.

Both Swing Trading and Intraday Trading Indicators are the same, the only thing different is the time frame.

In the beginning it will all look like a bunch of numbers flashing on the screen but after a while you will start getting in tune with the market and begin to understand how each part of the day reacts differently to news and volatility.

Once you understand these basic steps you will be in a much better position to begin trading in real time with a much better understanding of market behavior. That’s it for today’s swing trading and intraday trading discussion.

Next time we will discuss how to deal with your first real trading day. For more on this topic, please go to: Short Swing Trading – Selling Short Has Advantages and Understanding Swing Trading 

Wishing you the best,

By Roger Scott
Senior Trainer
Market Geeks