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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TheStockStalker who wrote (10969)	12/16/2000 9:36:12 AM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

PDT, OK I put some definitions below. You probably won't like them because I think it's the thing you think it isn't. The great thing about writing about the financial markets is that I get to make up my own definitions <g>. Last year, the industry started to label everything that wasn't scalping off a LII screen as "swing trading". They didn't do it because of their love of the practice. They did it to take some heat off of them when the Congress and the SEC were investigating their activities. I don't think swing trading is "in". Go to any expo or trade show. NO ONE is selling it because they can't make money from it. They are all selling scalping tools, systems and brokers (big surprise, not!). That's where most of my concern comes from. Nothing like looking at a crowd of wide-eyed newbies being told how easy scalping is by some old industry type. Then having that same person confide to you what a bunch of idiots his new customers are. Alan From you know where: "Swing traders seek to exploit direct price thrusts as they enter positions at support or resistance. They use chart pattern characteristics to locate and execute short-term market inefficiencies in both trending and rangebound markets. This classic strategy closely relates to position trading tactics that hold positions from 1 to 3 days or 1 to 3 weeks. But swing trading actually represents a time frame independent methodology. Modern practitioners may never hold a position overnight but still apply the exact same strategies as longer-term participants. The modern origin of the swing stems from George Taylor’s The Taylor Trading Technique, a classic commentary on the futures markets first published in the 1950s. His 3-Day Method envisions a cycle that classifies each day as a “buy”, “sell” or “sell short” opportunity. At its core, the narrow swing tactic buys at support and sells at resistance through congested markets. It fades the short-term direction as it predicts that a barrier will hold and reverse price. Modern trading expands this concept to locate the swing through many other market conditions and broaden the tactics that build profits. The equity markets present a natural arena for the swing trader. The symbiotic relationship between futures and equities ensures that cyclical buying and selling behavior crosses all markets. Equities have the advantages of massive liquidity and time frame diversity. In other words, participants can scalp the same market at the same time that institutions take positions for multiyear investments. Classic swing trading concepts must expand to unlock their power in today’s markets. The revolution in high-speed trade execution opens swing strategies that last for minutes instead of days. Dependable price patterns appear on charts in all time frames. As modern traders work with real time charting, intraday swing setups offer the same opportunities that appear daily on longer-term charts. The ability to trade through diverse conditions marks successful careers. Swing trading provides a natural framework to identify changing conditions and apply new methods to exploit them. This exposes another outdated concept for this versatile approach. At its core, swing trading is not the opposite of momentum trading. During those times when strong price movement characterizes a market, disciplined momentum strategy becomes the preferred swing trade. In this way, modern swing traders can apply the principles of risk management and price boundaries to the manic world of the speculator. And use momentum’s greed to their advantage."