Comment by Lazare | Hacker News Reader

Comment by Lazare | Hacker News Reader

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"A lot of people have flipped a coin 10 times and had it come up heads only 4-6 times, but I had it come up heads a full 7 times, so clearly I have an extremely proficient coin flipping technique. Sit down and listen to me discuss the wrist exercises I did!"

A lot of people have tried to do what the author did and lost all their money. He recounts how he lost tons of money on different occasions. He says it's been bad for his mental health. He freely admits that much of the limited success he did have was luck, and mentions that doing it during a bull market made everything much easier. But even so he product calculates that, once he mastered this skill hes...

...failed to beat the market. Ouch.

For anyone who skimmed the article (which spends about 90% of it's length talking up "swing trading" and making it sound like the author thinks it's a great idea), make sure you read to the end:

> So what should you do with your time instead of mastering swing trading? Find what you really want to do with your life that adds value to the world, and get to work!

Quite right. (Well, assuming for the sake of argument that swing trading is actually a thing, and that it's something that can be mastered.)

What’s swing trading ? Is that like day trading where you try to buy low and sell high on small fluctuations ?

It's like day trading, in that _it's total nonsense._ Reading tea leaves of patterns in charts of 'cup and handle', 'double top', 'flags and pennants' is what your gut tells you. It's astrology, dowsing, EVP -- our brains' amazing ability finding patterns in noise.

Once in a while, someone lucks out, or at least enough to turn it into a proselytizing grift. Y'know, like writing and selling a few thousand copies of an Amazon book or making a youtube series (totally something a successful investor would do!) Looks like this guy bought into it -- pity him!

> Being frugal, I still wanted to dabble with money-making opportunities at my disposal.

> Swing trading was one option, so I tried it.

> As a business teacher, I already knew a lot about trading and personal finance.

I can't believe these three sentences occurred in sequence. This man is a caricature of a Dunning-Kruger profile. Even a "frugal" "business teacher" succumbs to the lure of magical get-rich-quick thinking! I doubt he would have much pity if his own students indulged in such willful stupidity...

So heed exactly zero of his foolish advice -- it's a litany of what not to do in investing. Save for the warning not to pursue this folly.

Also note: the hottest version of this scam is in bitcoin: https://uk.tradingview.com/chart/BTCUSD/JwruXpQx-Head-and-sh...

> succumbs to the lure of magical get-rich-quick thinking!

When it works, it works. Is it gambling? Probably no more so than ISOs.

https://www.reddit.com/r/wallstreetbets/comments/80e7x2/the_... (/r/wallstreetbets | The Big Long - Made $2.5 million in January off $100k options investment)

The quoted passage is textbook rationalizing.

The clipped sentences, the defensive clauses "Being frugal", "was one option", "as a business teacher" and the rest of the article, all point to a man who wasted a chunk of his life in a rabbit hole and refuses to admit it.

At some point, justifying becomes gibbering. The author has reached it.

From Investopedia [1]

> Swing trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks. Swing traders use technical analysis to look for stocks with short-term price momentum. These traders may utilize the fundamental or intrinsic value of stocks in addition to analyzing the price trends and patterns.

> ...

> Day Trading vs. Swing Trading

> The distinction between swing trading and day trading is the holding position time. Swing trading involves at least an overnight hold, whereas day trading closes out positions before the market close. Day trading positions are segmented to a single day only. Swing trading involves holding for several days to weeks. By holding overnight, the swing trader incurs the unpredictability of overnight risk resulting in gaps up or down against the position. By undertaking the overnight risk, swing trades are usually done with a smaller position size compared to day trading, which utilizes larger position sizes usually involving leverage through day trading margin. Swing trading can utilize the overnight margin of 50% if the account meets the pattern day trading (PDT) rule of maintaining at least $25,000 in account equity. Swing trading on margin can be extra risky in the event a margin call triggers.

> A swing trader tends to look for multi-day chart patterns. Some of the more common patterns involve moving average crossovers, cup-and-handle patterns, head and shoulders patterns, flags, and triangles. Key reversal candlesticks, such as hammers for reversal bottoms and shooting stars for reversal price tops, are commonly used in addition to other indicators to devise a solid trading game plan. Stop-losses tend to also be wider when swing trading to match the proportionate profit target.

For anybody who wants to take a stab at something like this to see how easy it is to lose some cash, Investopedia has a fun simulator [2]. You start with $100k and can do traditional investing or shorts.

---

[1] https://www.investopedia.com/terms/s/swingtrading.asp

[2] https://www.investopedia.com/simulator/home.aspx

Yes. The idea is it's day trading, except you hold for a couple days, not a couple of hours, and you focus 100% on trying to figure out patterns in the stock and ignore all fundamentals. So you completely ignore like, whether the stock is cheap, or whether the company is doing well, and instead try and look for patterns in the stock price.

One he mentioned in particular was cup-and-handle; you can see a description here: https://www.investopedia.com/terms/c/cupandhandle.asp

The idea is, if you see a stock that slowly declines for a bit, it's possible that at some point it might start to slowly increase for a bit. And further, if it does, it might STOP increasing at the price level it originally started decreasing at. and then decrease for a bit instead.

Could this happen? Sure.

And if it did happen, and I bought at the bottom of the cup, and then sold at the top of the handle, I'd make money right? Yep.

But tons of patterns start by "slowly declining for a bit", how do I know this is a "cup-and-handle" pattern, meaning I should buy, and not one of the ones where it just, you know, keeps declining? You don't.

And if the company announced some really bad results, or loses or lawsuit, or something, halfway through the second half of the cup, right after I'd bought, I'd lose a fuck-ton of money? You sure would!

And I have no idea which one is which until it's too late? Yep.

So if I go around trying to recognise these patterns, will I make money? Oh hell no. It's like coming out ahead playing video poker at a casino; you might win once, but the odds are heavily stacked against you if you keep playing.

Trend, swing, momentum trading, all generally mean the same thing. In theory, the idea is that you buy something underpriced/overpriced when your technical momentum indicators tell you that momentum is increasing/decreasing. Can be used in all time scales (daily, weekly, monthly)

I was really interested in finance, technical analysis (Alex Elder books), etc for a bit, but don't really have the capital to do anything, and is probably soothsayer type stuff anyway. Best real strategy is passive ETF vanguard type investments

I'm not sure about the metaphor. With a little practice, one can certainly flip one's desired result with high probability. It's a pretty simple physical system (which is why coin flips in more fair circumstances usually mean letting the coin hit the floor, adding some complexity).

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