MarketLife Ep 19 - Short term trading: what works for me
This episode continues my look at short term (intraday and daytrading) systems and ideas. Here are the episode notes:
What’s really happening intraday
- Academic studies of market behavior show departures from random walk on lower timeframe
- These are distortions, but don’t assume that this makes for easy trading
- Highly competitive and very noisy.
- There does not have to be “a guy” on the other side of your trade! <= This is one of the persistent misconceptions about trading.
Styles of daytrading
- In a way, nothing new here, conceptually. We have:
- With trend
- Countertrend
- Countertrend often requires scaling in against moves. “Fade traders”
Issues
- Whatever you're going to do, it's got to get done between the open and close. This brings some challenges regarding length of swings.
- It’s hard
- People exaggerate and lie (win ratio is a big one)
- Time spent at the screen vs. payoff. Would you do better with a longer timeframe?
- Be careful of marketing hype.
My experience
- Scalping was a dead end. Maybe someone is doing it, but I haven't found that person.
- The less I did, the better.
- Having a daily setup/gameplan is critical (maybe trade against that plan!)
- Both with trend and countertrend approaches worked
- Pullbacks
- Fading new highs / new lows during certain time windows
- Plays around the open
If you enjoy the podcast, one of the best things you can do for me is to leave me a review on iTuneshere. The reality of the modern publishing world is that user reviews and comments help build audience faster than nearly anything else, and I thank you very much for your help!
Also, if you like the music for this podcast, then be sure to check out Brian Ashley Jones, my friend, and a fantastic singer-songwriter.
Enjoy the show:
