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What’s the Difference between Day Trading and Swing Trading?

There are different strategies you can choose from when it comes to trading. The most popular two of them are day trading and swing trading.  

What is the difference between them and which one you should choose?

Well, in this article we are going to introduce you to each and their key differences so that you can make a smart choice.

Let’s start.

Day trading strategy

Day trading is a style of investing where you make many trades in one day. You use technical analysis and sophisticated charting systems to find opportunities to purchase and sell certain assets. Day trading is riskier than some other styles of investing, but it can also be more exciting. But if you are up for the challenge, it can be thrilling and profitable.

Swing trading strategy

Swing trading is based on the idea that there will always be periods where prices change drastically, often referred to as ‘swings’. A swing trader takes these swings into consideration before making any decisions about the deal and the investment priorities for this particular day or week.

Difference between day trading and swing trading

Let’s go through a few essential differences between these strategies we have highlighted:

  1. The first and the most obvious difference is that a swing trader is looking for large profits that take place over a period of days or even months. Unlike day traders, who are more focused on short-term trading strategies and making money quickly as possible, swing traders search out opportunities where they believe there will be growth in stocks or forex before the market begins its next decline.
  2. We can conclude from the above that the difference between day trading and swing trading is the time frame for holding your positions. Day traders close out all their trades before exchanges open, whereas long-term investors keep them open until after hours.
  3. The swing trader has a slow accumulation of gains and losses, unlike the day trader. However, there are certain swings that can result in big profits or bankrupt you if not handled correctly such as when markets reverse direction quickly after being accumulating for long periods of time.

Which one is better?

Which type of trading strategy is better ultimately depends on your individual trading style. If you have a short attention span or prefer to take risks, then day trading may be the right choice for you. If you are less risk-averse or have more time to dedicate to trading, then swing trading may be a better option. Ultimately, the choice is up to you and your individual preferences. You can discuss the choice with the brokerage company you work with – see the legacyfx minimum deposit to find out more.

Conclusion

To wrap it up in one sentence, we will say that the difference between day trading and swing trading is time

The article introduced you to each trading strategy and explained the main differences between them. Both have their own advantages and disadvantages, so it is important to understand the differences before you decide which one is right for you. South African traders can read about global gt to get started with Forex market opportunities.

Author

George Rossi

George is the Chief Market and Broker Analyst at brokertested.com. Prior to being recruited by brokertested.com, I served SVS Securities as Chief Market Analyst for two years. Earlier, he joined Morgan Stanley in Nov 2013 as Research Analyst.

George is a well-rounded financial services professional experienced in fundamental and technical analysis, global macroeconomic research, foreign exchange and commodity markets and an independent trader.

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