Alright so I knew day-trading probably isn’t quite right for me, but swing trading on the other hand sounds just like my cup of tea looking from the outside.

Anyway the fundamental skills for both are probably similar and I want to make some remarks for myself and what I’ve learned so far plus my thoughts.

My Doubts about swing trading

Okay so while I’m learning, I do still have a question mark in my head as far as, others are learning the exact same fundamental skills and techniques … and short-term trading, while not as much as day-trading, is still a zero-sum or even negative-sum game.

So how could I, especially as a beginner, expect to make money or even at least, not lose money?

I’m not quite sure the answer to that at this point.

Maybe it takes talent.

My guess is, it’s more of a mindset game than a technical game, and those minority with the strongest mindset wins at it.

I’m not sure if I can be the winning group, but I’ll just keep learning anyways.

After all, even as a value investor, it’s still good to know TA and just get a bit better timing about getting into the market and also maybe adding or reducing positions based on some trends and indicators.

The important mindset I think I’ll need

So I think I can already see the mistakes that day-traders or swing-traders could make, and I’ll probably make them too.

I’ll try to keep a list here and maybe add to it as I learn and trade.

• Too greedy – either not waiting enough for the trend to form, or getting out too late because unsure about whether its a false breakout. Like the Japanese saying, just give away the head and tail of the fish. 頭と尻尾はくれてやれ
• Tilt trading – probably just like poker, after losing money and getting upset, too desperate to earn back what’s lost
• Being impatient – maybe there aren’t clear trends for a while and in line with greedy and desperation, forcing trends that might not be there

Extra Note – meaning of 頭と尻尾はくれてやれ

A very common mistake for beginners apparently is to try to buy at the very bottom, or in other words, predict an uptrend at the very beginning.

Also on the other hand they try to sell at the very top, which in other words, predict a downtrend at the very beginning.

The problem with that is, attempting to predicting an uptrend and buying at the lows mean buying when it’s dropping (against the market 逆張り) – it can work but especially for beginners it’s usually more often one will buy and then it’ll just keep dropping.

Of course the opposite is true – selling when it’s still going up, and one becomes susceptible to more upticks after selling.

So another way to do it is buy when it’s rising, sell when it’s dropping (follow the market 順張り). Obviously the downside here is, buying a bit later and earning less, and also selling a bit later and losing more.

But the advantage is being able to really confirm that a trend is there and maximize the chance of success of the trade.

That’s what the saying means – getting the entire fish is not that tasty anyways, so let’s give up the head and the tail of the fish.

To summarize:

• against the market 逆張り – better gains on successful trades, but more losing trades
• follow the market 順張り – less gains on successful trades, but fewer losing trades

I guess maybe both can work but I would probably be the “follow” style – probably can eliminate some volatility in the earnings too with fewer failed trades. Let’s see though as I learn more while keeping this in mind.