Market corrections come and go like feeding times and breeding cycles. When using swing trading methods on daily/weekly/monthly time frames, you have to worry about this stuff more than say, a day trader.
The stocks I researched all had corrections of weeks before their best moves. They were all low float, low priced, and some had earnings while others did not. We have beaten that horse maybe not here but every where else. It's established. But market timing...knowing when to put your bait in the water...is required to be a more efficient swing trader. It keeps you in when odds are in your favor, and keeps you wading and watching when odds are not in your favor.
So the question also remains for all of us: what is your style? Are you a day trader? Are you a swing trader? Are you both? I have had to search for this answer myself, as recently as a few minutes ago.
I recommend reading page 346+ of The Hedge Fund Edge, where it talks about taking a trade to the next time horizon. I always thought of it as taking the trade to the next bigger chart. I have been looking at this a lot lately as I have experimented with adding day trading to my skill set. Not frequent trading, but day trading. We are talking 0-5 trades a week. A day trade may become a 2-5 day trade in the right conditions.
So my answer for myself...is I am both. I may use day trading entry methods on a 15-minute chart and swing trading exit methods on an hourly or daily chart. All this means is that I look at the bigger chart as a guide for my 15-minute trade.
As a trader I have undergone some reconstruction this year and have gotten back to even from being down a little less than 10% ytd. So I feel like I have a chance to start the year over. The thing about it is that I am using methods created and taught by two great traders and teachers. I will not re post their methods here, although I probably could. The reason is because it will do you no good without going through what other successful traders have gone through. There are no shortcuts.
See the links on this page to Stockbee.biz and TumberTrades.com. Stockbee is a blog and learning site focused on swing trading. I learned about market timing and market breadth with the site, and I use his market timing indicator, Market Monitor, for my swing trading. There is infinite value on the site.
TumblerTrades is run by a trader I met on Stockbee who evolved into a day trading artist. He has been called a machine, but I see after talking with him that he is an artist. He is by far the best day trader I know and the most consistent.
The other important link I use is the Patient Fisherman, also run by a trader I met on Stockbee. I use this site for all of my momentum and PEAD based watch lists. It is also good for getting Market Monitor data over the web without need for Telechart.
Happy Trading
