Day Trading Vs Swing Trading : What's best for you ?

Day trading and swing trading are two different types of trading styles. Both work on different timeframes and require a different mindset altogether. Making a decision between Day trading Vs Swing trading is quite tricky especially at the start of trading.

Both styles have their own advantages and disadvantages and which is right for you depends on your trading goal , capital you have and time that you can spend in-front of the screen.

Summery of Day trading Vs Swing trading.

	Day Trading	Swing Trading
Capital Required	Less ( Leverage available to trade large positions)	High ( Large capital required to trade large positions)
Trade Timeframe	Trade is closed on same day	Trade may last for some days or weeks
Trading tools required	Stock selection , Intraday support resistance , price action	Chart patterns , indicators , support & resistance , short term stock momentum
Screen time	Very high ( almost 7 to 8 hours a day)	Less ( Few hours a month)
Mindset skills	Sharp focused mindset , ability to make quick decisions under pressure , discipline	Ability to analyze number of parameters to make decision , discipline , Patience

Day Trading Vs Swing Trading

Table of Contents

Swing Trading

In Swing trading type of trading style, traders hold on to the assets for several days, or weeks, and try to profit from price movement also known as Swings.

A stock in a trend, or moving sideways will always have ups and downs. Swing traders, are trying to capture these ups and downs to make profit. Swing traders try to buy at swing low and sell at swing high.

Day Trading vs Swing Trading — Swing Trading

Traders mostly use technical analysis using daily charts for swing trading. This type of trading styles Candlestick patterns , support and resistance , moving averages are popular among swing traders. Swing traders are looking for price change over several days because of a news, earnings release or any other catalyst. A swing trader can be a bull or bear or change his position depending on situation in the market.

Various candlestick patterns such as Hammer , Invented Hammer , Shooting star are popular among swing traders.

In swing trading you can make money on both sides of the market especially if you are trading futures contracts. You can either buy or sell depending on the

Position sizing and pre-defined risk – reward ratios form the backbone of this style of trading. Traders can earn monthly income in swing trading.

Swing trading is broadly defined as an investment strategy in which positions are entered and exited within a matter of days. Generally speaking, swing trading is a slower trading strategy than day trading, in which assets are bought and sold within hours.

As part of the investment strategy, swing traders actively seek out peaks and troughs in the price of a particular asset. This information helps create predictions regarding future price motion that the swing trader can use to generate profit. Although there is no assurance, of course, that past actions will be reflected in future trading, swing traders leverage a trove of historical data alongside current activity to determine what their best course of action will be.

One needs to be active as a trader and continuously look for opportunities to trade. This style of trading is suitable for people, who want to make trading as a full-time job , it is also suitable for people with existing job, or business as a side hustle.

Day Trading

In day trading type of trading style, trades are closed on the same day and no position is carried forward to the next day.

Day traders are types of traders that hold on to assets for few hours. This style of trading is fast paced and can be stressful at times. Day trading, is demanding in terms of time and efforts and requires a lot of screen time.

This style of trading, requires a lot of discipline in terms of position sizing and stop loss, to be successful as a day trader. Stock or asset selection, is very crucial to be successful in day-trading.

Traders can make money only, if the selected stock makes a big move on that very day. Traders use 3- or 5-minute candle-stick charts along with indicator set-ups for trade entry and exits. Intra-day support and resistance , Break out strategies, V-wap and use of oscillators are very popular in day trading.

Day trading has potential to earn big money but, the risks are also high. Many brokers offer large leverages for day trading , this means, a person can trade bigger size with a small trading account.This can be helpful and also dangerous at the same time, as you can pile up large losses very quickly.

Day trading is generally suitable for those who can spend a lot of time in-front of the screen. It is difficult for people with existing job to day trade, however some assets can be traded throughout the day and people with a day job can trade these assets. Brokerage and slippage become really important and can significantly erode profits.

Overall day trading, is a high risk , high reward game and one must be careful before entering into it.

Day Trading Vs Swing Trading : What’s right for you ?

If you have a day job and you want to invest in market as a side hustle or you do not want spend a lot of time in front of computer screen, then you should go for swing trading. It it slow paced , you get your time to make decision and reflect on it without losing a lot of money. You do require a lot of capital though.

If you are game for fast paced action and want to earn a lot of money quickly ( of course with a lot of risk? ) then you should select day trading. You get a lot of leverage from brokers as you do not intend to carry your trades overnight. Day trading requires a lot of discipline , if you do have it then you will soon blow off your trading account.

Day Trading Vs Swing Trading : Which is more profitable ?

On an average swing traders tend to be more profitable over long term. More day traders generally lose money very quickly and quit trading. It is actually difficult to say if one is more profitable than other , it completely depends on what trading strategy you use , discipline you follow , risk to reward ratio and so many other things.

Swing traders generally remain in the market for longer time. They generally have a lot more capital involved in trading and are generally more cautious in nature. If you reman in the game for long enough and follow the discipline you will end up making profit.

Day traders on the other hand need to make money almost everyday , day trading can be dominated and ruined by emotions and day traders can make profit only and only if they overcome emotions!

Summary : Day Trading Vs Swing Trading

To summarize both styles have their own advantages and disadvantages and which is right for you depends on your trading goal , capital you have and time that you can spend in-front of the screen.