Swing trade vs day trade. A big question for those venturing into swing trading is how is it different from day trading? A few distinctions have a common theme: time. First, the time frames for holding a trade are different. Day traders are in an out of trades within minutes or hours. They are the meter dash sprinters of the trading.

Swing trade vs day trade

What's the difference between penny stocks, day trading, & swing trading?

Swing trade vs day trade. When it comes to day traders vs. swing traders, it is important to understand that day traders profit more in percentage terms when trading on smaller sized trading accounts. For swing traders, they can maintain their percentage returns as their account grows. Regarding capital requirements, it varies.

Swing trade vs day trade


So which trading approach is better? As a day trader, I like to control my risk. I will never be able to eliminate all risk from trading, but by holding a position only for a few minutes - or maybe even hours - I can control the risk much better than holding a position overnight.

Let's say you are driving down the highway at 70mph. There's no traffic, the sun is shining and you are just cruising. Now you decide to let go of the steering wheel for a quick second. You're still in control of the car, aren't you? Now let's assume you let go of the steering wheel for 5 seconds. Well, maybe your car drifts a little bit into the other lane, but you can quickly correct it and since there's no traffic, probably nothing will happen.

It might have been scary for a second, but you are still in control. But what would happen if you decide to let go of the steering wheel, unbuckle, climb on the back seat and try to take a nap? The car will drive off the road and you'll get into a major accident, right? And that's how I feel about holding a position overnight - you're simply no longer in control. If you are trading a market that's open 24 hours a day e.

Forex or Futures , you could place a stop loss, but often the markets have some wild swings overnight. So, you might get stopped out with a loss, even though when you wake up the next morning, the market is trading more or less at the closing price of the previous day.

If you trade stocks or ETFs , then risk control becomes even more difficult. For example, you could place a stop loss, but if the market opens BELOW your stop loss the next morning, you will be out of your position with a much larger loss than planned. And especially these days the markets are crazy! News from Europe or Asia can cause huge opening gaps, which make risk control extremely challenging. Some traders might say that when day trading, the profit potential is much smaller.

That's true, but especially when trading futures, your day trading margin requirement is much smaller than your overnight margin requirement. As a result, you will have significant leverage.

But, keep in mind that leverage is a double-edged sword and can work in your favor as well as against you. It might take you a few days until you realize this profit. But if you are day trading, you could trade 10 contracts instead of just one, and you only need a move of 2 points in your favor to realize the same profit.

To me this is like taking your hands of the steering wheel for a few seconds. Chances are very low that you will wreck your car in this short timeframe. I like to control my risk as much as I can, and therefore I prefer online day trading. I haven't held an overnight position since Especially these days the markets are crazy, and I don't like to worry about my position in the evenings or on the weekends.

And I know I would if I had an open position. I would check the markets in the evenings before I go to bed, during the night when I wake up and first thing in the morning. That doesn't sound like fun to me! Do you prefer swing trading or day trading? What's your trading style and why? A recommendation I heard is that if you get a big bad gap, wait to see if it moves back your way.

Maybe exit if it drops below the first 15 minute low if long. December 8th, at 2: When buying options, your risk is limited. However, if you decide to sell options, then the overnight gaps can get you in trouble.

Daytrading is only for people who are very smart and who have traded at least 2 years in position trading. Ram, Discipline is extremely important in trading.

It doesn't matter whether you are swing trading or day trading. You must have a plan and follow the plan. You shouldn't let emotions guide your trading. And I believe that day trading is a very good choice for beginning traders, since you can risk less on a day trading setup than you would on a swing trading setup. Therefore your risk is limited, which is good for beginning traders with rather small accounts. They both have it advantage and disadvantage because i trade as a Day trader and swing trader depending on what the market is ready to give me for the day.

If for that day there is no much activity, i day trade and the trend is not well define but on the other hand if there is a clear good trend in place why would i close my position if i could get maybe pips than close out at pips? So overall you get to pay less commission or other charges than day trading. Each trader will just have to find out which is best for him or she and have a trading plan in place otherwise you are sure to fail because failing to plan is plan to fail.

As a trader and a writer for TorqueNews. In other words, I swing trade within a day trade environment. Take the Euro futures for example: I use swing patterns to go long and short throughout out the day. I seldom take overnight positions, unless I have longer-term view such as gold.

Even then I use the 5-min chart to define entry points. I prefer swing trading. I like day trading but it s really hard win money in trading day. How many people win money in day trading and how many people wins moneys in swing trading, May be, i prefer more risk with a overnight trading and try to win something with swing trading thank you sorry becasuse my english is not so good.

I have been a swing trader and i have now moved into day trading. It is indeed possible to make money in both strategies but i like Markus statement when he said swing trading is like leaving the steering wheel and take a sleep at the back seat. Though technology can work for us but can also work against. Better be in control of a situation, i therefore prefer day trading. A discipline trader religiously following a plan coupled with risk and money management is more happy on day trading.

Happy trading to all colleagues. I agree with you.. If I have an open order, maybe I'll not be able to sleep. I agree with what you are saying, but I also think that some of the most reliable chart patterns occur on the daily charts. I have used options in the futures and stock markets to mitigate the risk factor. Part-time traders have no recourse but to do swing trading since the boss frowns on day trading ;-. I suppose you have the possiblilty to ride the trend much further on the day charts.

When market is either a strong uptrend or downtrend, swing trading is better and always can get a bigger chunk of the profit. Day trading is good if you are a winner. It is a full time business and you must be well educated in market technicals. You must know to control your greed and fear,for that you must keep your stop loss properly. You must know to select a good rating stock for the day and trade only one market to have a good concentration and focus.

One disadvantage of day trading is the brokerage,you are feeding your broker. I am trading forthe last 20 years and if the market come against me I hold the stock as a swing trader,but I never average. Markus ich habe Gern dein schreibung Grussi. Contrary to recommendation, I have found Swing Trading more profitable. However, having said this there are few conditions as follows to be full-filled:.

Select a particular share whose Candle is down 3 to 5 big Candle down and has big volumes. No adverse report about the particular share or environment.

I have found if the above 3 conditions are met, it is easy to make money. The reverse is the case if short-selling is intended. As for me I am in total agreement with you. No way could I have swing traded. A lot of small trades to start with until I built up a more robust account..

Now I do an average of 2 - 3 high probability trades a day. At 89 I I can put in whatever time needed. I compare my results vs many of the longer term results shown on manyof the websites and am not only favorable but often exceed them over the same extended period. The spreads are negligible plus I sleep better. Your car driving examples are great. I would rather get hits a season, score and drive lots of runs than to hit 30 home runs but strike out times and leave too many runners on base.

That was fun However we all have freedom of choice. Irwin, you are 89 years old and trading? Are there any traders reading this blog that are older?


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