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Day Trading vs. Swing Trading

Guide to stock trading

One thing I’ve always loved about trading is that there is not one single approach to tackle the markets. There are several ways to succeed and various styles to get you there. Every trader is different, just like every human being is different…

However, there are two overarching categories a trader may fall under- so let’s break it down: Swing Trading vs. Day Trading.

Swing Trading:

These are traders who prefer to be in long-term positions, usually following a long-term trend. Swing Traders typically hold positions for weeks, months, or even years at a time. This style of trading can be the preferred method for those who have a full-time job, cannot be on the charts often, or simply prefer a longer-term view of the markets.

Characteristics of Swing Trading:

  • Focuses on long-term trading
  • Main analysis happens on higher time frames (daily, weekly etc)
  • Requires more patience as setups may take days, weeks or months to develop
  • Fewer opportunities since they take longer to develop
  • Less chart time required than day trading
  • Great for those with a confined work schedule
  • Potential for slower account growth, due to holding positions longer
  • Less account volatility due to less risk

Day Trading:

These are traders who prefer to be in short-term positions, usually trading the quick runs in day to day movements. Day traders are typically in and out of a trade within a 24 hour period, but may allow a position to run longer if necessary. This style is great for those who like to spend more time on the charts and capitalize on daily momentum.

Characteristics of Day Trading:

  • Focuses on short-term trading
  • Main analysis happens on intraday time frames (1H, 4H etc)
  • Ability to identify entries early, first to market
  • Profit taken earlier than swing trading
  • Requires more chart time than swing trading
  • More stress due to quicker response time needed
  • Takes advantage of small movements in the market
  • More trade opportunities than swing trading
  • Potential for quicker account growth (if consistent)

Regardless of their differences, neither style outweighs the other. It is also unrealistic to say which is more profitable because there is no ‘better’ style of trading; it all comes down to skill and personal preference of the individual trader. Some traders are drawn to look at the charts daily and execute positions on the intra-day charts (day traders) while others may only want to scan for opportunities on a weekly basis and have more of a long-term approach (swing traders).

That being said, implementing a hybrid style of long and short-term trading can be optimal in capitalizing on various market movements, which is exactly what I teach. And this simply means combining the benefits of both day trading and swing trading, allowing a trader to optimize their time on the charts for the greatest reward possible. Think of executing a trade on a lower time-frame (day trading) but holding it for weeks (swing trading).

In my Trading MasterClass, I cover this ‘hybrid style’ of trading in much more detail and personally refer to this as The Holy Grail of my own trading. Click here to become my student. 

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