OZ, what's the big deal? As a definition, it seems obvious that "daytraders" go home flat. So while MMs certainly daytrade, they also hold inventory, sometimes perhaps positions, too, which makes them "traders" rather than just "daytraders". What you describe might best be described as a short-term trader, one that makes both day and swing trades. What's important, of course, is not the label a trader has, but how well they control their risk. As you point out a swing trader, actively watching his stock, can get out the same day he took his position, if he wants, in order to observe the common daytrader's rule of not taking losers home overnight.
Swing traders IMO take larger risks to achieve larger rewards than day-only traders. No matter how "right" the setup is holding an overnight is a risk and being flat is no risk. I think there should be a label for day-only traders and nothing fits the bill better than "daytrader."
I realize that for some reason many hybrid short-term traders call themselves daytraders (The Velez-Capra book is about both swing and daytrading, mostly IMO swing, yet the title is The Master Day Trader). But this confusion IMO is why the media makes the mistake of thinking daytrading is the riskiest of all trading styles.
The point of a vibrant, evolving language is to make finer distinctions which lead to greater clarity and more precise thinking. Thus I submit the types of traders we are on this thread are: day (go home flat), short-term (hybrids who day and swing), and swing. |
