Must Ask Question #1 for Swing Trading: What time frame have I chosen in my overall trading plan based on my schedule, lifestyle and natural cadence?
This question is an important one because it allows you to trade from a position of overall focus and clarity. Yes, these words sound a little “woo woo”, but what difference does trading really make if the activity of trading and the related income are not aligned with your overall life goals?
The point of trading is to build wealth working when, where and how you choose. This question allows you to trade with the end in mind; wealth accumulation and a great lifestyle.
Getting clear about the end result allows you to easily see the best time frame for your swing trading. You sort of back into the strategies and time frames that work best for you by first recognizing your life factors.
Let’s look at each of these factors, schedule, lifestyle and your natural cadence, to see how day trading, swing trading or swing investing best fits into those factors for you personally.
First, let’s talk schedule….
Since trading requires you to be alert, highly focused and playing at the very top of your game, it only makes sense to trade when you are best functioning this way naturally. Only you know when you’re at your best.
Are you a night person or a morning person? If you function best when you sleep from 3 am until 11 am Eastern US time, why even consider a trading time frame that requires you to be placing trades when the market opens?
Likewise, if you know that you have other business or family commitments at 4 pm Eastern Monday and Thursday, don’t choose a strategy that requires you be present and active for the close every day.
For that matter, if the highlight of your life is golfing with your buddies every Friday afternoon, then maybe day trading weekly options isn’t the best choice for you.
Does this mean that a person cannot trade, or has to adapt their schedule so they can be a more active trader? Of course not, it simply means that they should adapt their trading style and time frame around their optimal schedule.
Make your trading schedule work for you, not the other way around. There are many potential trading time frames. Choose yours with an eagle’s eye view of the life that you want.
Second, a factor closely related to schedule is lifestyle….
What swing trading time frame works best for your lifestyle? I’ve traded with ER doctors in our trading room who are at the top of their game on their medical off days. Swing trading throughout the day works perfectly for them.
On the other hand, we have many members who work full time, with young children and a spouse. Checking their positions in the evening after the activities of the day allows a nice reprieve from constant interaction with others. Swing trading over several days is ideal for this schedule.
Swing investing over several weeks also makes sense for these super busy executives, while also laying the foundation for a smart retirement income on a flexible schedule in the days ahead.
Third, what are your natural tendencies?
Does it make you crazy to sit at a desk for more than half an hour a day?
Or do you thrive in an office environment where you can relax and watch the markets throughout the day with a large cup of joe?
Do you enjoy watching the markets and hearing the latest news?
If this is you, intraday swing trading suits your personality.
Or do you prefer to check positions once or twice a day, maybe at lunch time and on the market close? Intraday swing trading can still work well for you, but maybe swing trades over a couple of days make the most sense.
Do you only want to check your positions once a week? Then swing investing definitely makes sense for you. Can you do it? Of course you can, but you may want to use weekly charts, which I’ll address in the next article in this series about choosing the right chart time frame.
Why make things harder than they need to be to live a balanced and full life? There’s no need to, and that’s one of the very best things about being a trader.
You are in charge of your strategy based on what works best for your own schedule, lifestyle and cadence.
And we all naturally perform best when we’re fulfilled, our energy level is high, and we feel congruent with our life goals. Why not take advantage of these attributes to ease the path of wealth creation from swing trading?
Want to know which chart type is best based on your answers to the 3 questions above? I’ll be sharing this and more in my upcoming free Swing Trading webinar. Click here to register here now because spaces are limited and these webinars always fill up.