Hi guys.
I am a profitable day trader.
I also fucking hate day trading. I hate being glued to the screen all day.
I'm a slave, protecting my capital.
I am 100% technical trader. I know nothing at all about fundamentals.
and I want to avoid trading long periods of times I feel where Fundamentals come more into play. So Im avoiding months/weeks time frames
I want the fastest form of swing trading available. Which I feel is like 5 Hour/ 1 Hour charts.
I say 5/1 because my strategy is a multi-time frame Strategy. Where I analyze a trend on the 5 Hour, and then get a "Value" entrry on the 1 Hour.
https://preview.redd.it/f71c1tg0kv7h1.png?width=1792&format=png&auto=webp&s=8e78fff9eddfd6991698211957fb8c79aae57da3
Heres a typical set up for me. Nothing magical. This is a trade I took on Monday, still in it as I type now. Shorted CHWY at 19.37 x 500 shares , Bought 5 calls at .79 with 12 DTE
With day trading I'd just use stop losses. I like using Keltner channels to measure potential price swings, and usually place my stops 2x Keltner channels out, in the chart that's where the Blue shading turns to orange.
When using stops my posiiton size is dictated by my stop width.
For example in this scenario my stop would have been at 19.81
19.81-19.37 (entry) = .44 cent stop width I would have sold 1,136 shares
To be capped a max risk of 499.84 dollars ( 500 is max risk)
Now normally -
In day trading since its so noisy. I set two points on my chart.
1.5x my risk and .5 my risk .
Using my example above
I'd have to set my half take profit at 19.15. Capture .22 cents and sell 586 shares
Capturing 124.96 in profits.
At the same time I move my stop lower by .22 cents so now if It turns around on me, im a Break even.
The rest i take profits at 18.71 capturing .66 cents (or 1.5 initial stop width) selling the other 568 shares netting 374.88 on half 2 For a combined total of 499.84
Or pretty much 1:1 total Risk:reward.
I had a 73% win rate with this set up and this strategy day trading the 30m/5m charts
I had alarms going off all day and night ( i traded futures primarily) , and I was always checking charts, it never stopped.
So questions :
1. Stop losses in swing trading scare me. News bomb shells etc, the idea of opening up above/below my stop loss and doing potentially huge damage to my account scares me.
Has this ever happened to you guys ? Whats the worst damage you ever saw due to a market event / blown stop loss that didnt fill or just opened up beyond it ?
I'd imagine you'd avoid picking trades right before earnings as well..
2. Im pretty good at predicting near term price movements. But the cost of Hedging is high.
Still, based on a little chart reading on these time frames CHWY moves up and down 2-3.00 on this time frame, so .79 to cap risks and be immune to Events seemed like a good deal.
Do any of you hedge with a Long option? Is this the right way to go about it ?
3. For those of you who trade a similar time frame 4-5 Hour charts Or even daily charts
and also trade trends in a similar fashion to me. How many posiitons do you guys average in a week.
Hedges mean I need liquid option markets, and I have about a 100,000 account im trading with. I like to never have more than 2% risked in any one trade, and never more then 6 % at one time.
So ideal would be 3 positions per week at 2% each, or 6 positions at 1% if at all possible.
But capital efficiency becomes an issue with the more expensive stocks. So Im trying to stick between a price range of between 10-50 dollars per share. Whats a reasonable expectation per week or per month how many trades could be completed
4. Do you guys ever hedge with a Short option? Covered call / put ?
Like a .30 delta -ish option you'd have to use a stop loss of course but I supposei f you get stopped out you can recover a little bit of money on buying back the option to smooth out damage in the long run.
5. Do you guys who trade with stops shoot for 1x, 2x, 3x ? Im wary of the let winner's run idealogy...at least in Day trading it was a sure fire loser. More often then not winners arent really winners and profits pull back Real quick best to take profits when you have em and move on. But is that the case in your experiences with swing trading ?
Thanks in advance for any insight you guys can offer