Which Is Better: Time Frame or Specialization?

There is a debate as to whether it is better to be a day trader or a swing trader. This debate is rather futile. The market is the best determinant of how long you should be in the markets. No one in their right mind holds on to a losing position simply because they are swing trader, nor will they cut off their profits right in the middle solely because they are a day trader.

Their actions would break one of the core tenets of trading, “cut your losses and ride your profits.” That’s just common sense. Yet, time and time again, traders break the only rule that makes their trading successful. This is done solely to adhere to an artificial time constraint that the market doesn’t put on itself.

Is there any wonder that so many traders have difficulty when it comes to trading? They want to let their profits run, but their day trading system forces them to get out as quickly as possible. Position/trend traders insist that the trend is their friend, but they won’t cut their losses because the trend has not “officially” changed. Time frame trading is detrimental in the long run. No market will neatly adhere to the time frame you want to trade. The market will do what it wants and if you are not careful enough to pay attention to it, your trading will be more difficult than it needs to be.

On the other hand, when you specialize in a particular market, market direction, or strategy you give yourself the freedom to trade any time frame based on a different set of criteria. You are fixated on optimizing your profits by managing your risk. Whether a 5-minute chart or a 30-day chart, you make it infinitely easier to enter a trade and cut your losses. This is the key benefit to choosing specialization over time frame.

Pure Trader versus Flexible Trader

If it isn’t broke, don’t fix it!

If you are happy and successful with the type of trading you’re doing then the techniques presented here will be helpful. The intent is not to stop you from doing what works. The goal is to expand your horizon and make your decision-making process more flexible, based on the markets’ rhythm, not your own.

Much confusion results when traders attempt to follow market truisms, but feel their hands are tied because of arbitrary time frames. While being a pure trader can be an effective way to earn profits, you must decide whether you want to make living at it or you are only looking to make extra income. Depending on that decision, various time frames may or may not work for you.

Forcing yourself to be a day trader is a difficult task if you are simply looking to earn extra income during your retirement. You may want to travel or take a vacation, and the moment you walk away from the screen is the moment you stop having the market work for you.

On the other hand, if you are trying to earn a living from the markets and are looking for monthly market trading results to pay the bill, swing trades may take too long for you. Whatever the case, you don’t have to force yourself to be a different trader than what your lifestyle can accommodate. You can accomplish your goals regardless of the time frame, as long as you keep your eyes on your ultimate profit-making, risk management objectives.

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