The swing trading camp argues for more patience and will claim the ability to realize sizable intraday price moves. In the case of the ES contract, 10-point home run trades often are claimed as practical. "Swing higher" (below) shows a market-profile-based swing trade in the Russell 2000 mini contract (TF). When the market opens gap up (Jan. 3, 2011), a retracement to the previous session’s Value Area High (VAH) is a significant price action event that can be used by the swing trader. Scale-out profit-target exits may be used on fractional portions of the original position.
Trading is about finding a niche that works. Traders with moderate day-trading experience, or more experienced traders having recent difficulty with profitability, probably have the debate on their minds. In addition, the unpredictability of the market forces traders to make a decision regarding scalping or swinging a position at any point in time. Perhaps a successful trader becomes accomplished at both, much the way a golfer perfects both the long and short game.
We’ll look at both strategies and provide some data that will help refine our plan. While the discussion applies to day-trading any asset, the focus is the electronically traded mini stock index futures contracts traded during the U.S. day session.