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

To: TraderAlan who wrote (10971)	12/16/2000 1:58:38 PM
From: Apakhabar	Read Replies (3) \| Respond to of 18137

Hi Alan, I've been surprised during the recent discussion to learn that in your definition one can "swing-trade" entirely intra-day. One reason I assumed you thought the current Nasdaq market was lousy was because the current market has not been rewarding the sort of long-side, multiday catch-the-middle of a trend trade that is popularly thought of as a swing trade. I would think that in spite of the difficulties posed by the uptick rule that by your definition you would've been able to find many opportunities for short, intraday swing trades during the past few months. Not that I have any skill in this arena, mind you, so I pose this question naively. You've mentioned that shorting is uncomfortable because stocks seem prone to sharp, temporary short squeezes, but how are they really different from the brief furious sell-offs that always occurred during the tech rally to Naz 5000? It almost seems like swing traders have no fear at all taking long positions no matter how high the valuations, yet when stocks actually seem to be undervalued, they lose faith in their charts and indicators that might suggest they go short. I am assuming that nobody's charts and indicators have been suggesting long-side trades during the past two months. Again I may be confusing momentum and swing strategies... perhaps you can clarify the difference as I have always understood momentum to be of a shorter duration than swing. I appreciate your disdain of brokers who hawk scalping strategies as a way of maximizing their own commissions. Their behavior, however, doesn't make scalping more dangerous for beginners than any other strategy. IMO all trading (as opposed to investing) is dangerous for beginners. To say scalping is "an advanced form" because some shysters push novices into its potential slaughterhouse isn't logical. Perhaps it's better simply to warn novices about the shysters and counsel novices to be patient and not fully commit themselves to a trading method until they discover what is most suitable to their temperament. All trading methods reward at least months if not years of preparation, after all. To me, the most advanced aspect of scalping is the trader's full, internalized acceptance of its elegant limitations. You've got to be satisfied with the less-risk, less-reward equation. When a stock goes up 10 points in a day and you only made 1 1/4, you can't feel chagrin and think you "should've just held through the dips." The worst mistake scalpers make is always when they extend the naturally-brief time frame. That is why I have modified my rule about averaging down. Nowadays I may consider averaging down as long as doing so does not extend my very brief time-frame. (It's still a very dangerous practice, however, and I ONLY do it with stocks that I have traded extensively. I have learned the hard way NEVER to average down on a stock that you don't know intimately.) As always I look forward to your comments.