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Day Trading vs Swing Trading

ByDave Stopher

May 27, 2021

Two ways active traders can stay plugged into the stock market are day trading and swing trading. The aim is to make a profit from short-term stock movements. But which trading style is better? Day trading or swing trading? Let’s look at these two methods closely.

Day Trading

Day trading, as the name implies, involves the use of charting systems and technical analysis to make many trades in a day. Day traders use leverage to get bigger returns from really small price changes in different securities. If you want to become a day trader, it’s advisable to carefully choose a broker with the right leverage before tradi ng. As a tip on choosing brokers, check out broker reviews like topstepfx review and make comparisons. 

Most day traders do not own any securities or maintain any positions over the night. According to the U.S Securities and Exchange Commission, day traders run the risk of higher losses since they trade on borrowed money, so only risk money you can afford to lose.

One thing of note about day trading is its demand for great concentration. You have to continuously watch the market during the day at your computer terminal. For day traders it is utmost important to place your trade with a reliable broker like jafx and go through jafx review 

No level of formal education is required to be a day trader. Although, a few courses on computerized trading and technical analysis can prove quite helpful.

Day trading requires the mastery of unique skills. Diligence, decisiveness, and discipline, among others, are some of the traits a successful day trader should have. As a day trader, your goal should be to make small profits on numerous trades in a day and to cap losses on unprofitable trades.

Swing Trading

With swing trading, traders aim to profit from the price swings in a marketplace. Unlike day trading, these positions usually remain open for a few days to a few weeks.

One advantage that swing trading poses is that time commitment is relatively minimal. With day trading, you have to monitor prices and analyze data frequently. But with swing trading, you only need to spend a couple of minutes at the end of every trading day to carry out your analysis. Because of this, you can decide to keep your regular 9-5 job or business that brings in constant profit and also work part-time as a swing trader.

Having a good strategy and proper risk management will aid in profit-making in swing trading without stress.

Substantial losses can be accrued from swing trading, just like day trading. This is because swing traders hold their positions longer than day traders and there could be overnight and weekend gaps. The issue with gaps like these is that they make a trader’s stop-loss useless.

Also, note that market timing is difficult in swing trading, even for experienced swing traders.

Swing Trading or Day Trading?

The truth is that both swing trading and day trading have numerous advantages and disadvantages. No one is better than the other. It all depends on the trader’s skills, preferences, and of course, lifestyle.

For individuals who have a passion for trading full time, and possess the necessary traits that make a successful day trader, day trading is without a doubt better suited for that individual.

On the other hand, anyone can perform swing trading;

If they can perform fundamental and technical analysis,

  • If they have some investment capital,

If they want to retain their business or job while trading part-time.

Once you’ve decided on which of the two suits you better, before you settle for any broker, ensure to do thorough research. Check out this review of the darwinex review to get a start on your trading career.