Swing Trading and Day Trading: Explanation and Comparison

How to Become a Amazing at Day Trading

The first thing you need to decide to become a successful trader is what timeframe you will trade on. This is something you should approach with responsibility because the trading period you choose can seriously affect your success in trading.

Most often, you would choose between two options: day trading and swing trading. In both cases, traders try to make money on short-term price fluctuations, unlike investors who use long-term strategies for their trading. Other styles (for example, scalping) do exist, but the latter are suitable for experienced traders who know various trading strategies and the market itself. So, in this article, we will review and compare swing trading and day trading.

Day Trading for Beginners

Day trading, as you might guess from itself, is intraday trading. These are several or even dozens of transactions that are opened and closed within one trading session. Most often, a transaction decision is made based on graphical and technical analyzes. Day trading stocks, the goal of the trader is to earn a living by earning small profits from many transactions in the stock market, currency, and futures.

On the other hand, non-profitable transactions must be closed quickly, so the loss from them does not exceed the profit received from profitable trades. The main feature of day trading online is that, as a rule, traders never transfer their position overnight – all transactions are closed until the end of the current trading session. Let’s look at all the advantages of day trading:

Now consider the shortcomings of day trading:

Swing Trading for Beginners

Another style worthy of attention is swing trading. What is swing trading? It allows you to make a profit on the volatility of the stock prices. Instead of focusing on a specific time period, swing traders determine the direction of price movement, open a position, and hold it for the entire period of growth/fall in the price.

Unlike day trading, when swing trading stocks, you to keep trades open for several days or even weeks. It all depends on whether the chosen direction is somewhat promising. The features of swing trading include:

Let’s also look at the disadvantages of this trading style.

Conclusion

It is quite difficult to point out the best trading timeframe because each of these trading approaches has its advantages and its disadvantages. It cannot be said that one of them is better than the other – you must determine for yourself what is best for you based on your skills and lifestyle.

Each trader is different, and each person has his own comfortable conditions in which it is convenient to trade. Also, you do not have to choose just one strategy for yourself. There is always an opportunity to combine them and choose the most profitable path at the moment.

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Carolyn Huntington is an economist, professional trader, and analyst. She made her first big deal in her student years with a profitable investment in Facebook stock. Now the total experience of her trade is 18 years. Over the years of trading, Carolyn has developed its own strategy that allows even those who have never traded on the stock exchange before to earn money. She also creates market forecasts and advises major shareholders, compiles investment portfolios, and teaches how to work with automated advisors.

telephone: 503-547-5192