We all understand that swing trading and day trading are two different trading techniques, but which one is better and what exactly make them different? Here, in this post we take a look at day and swing trading to compere which one is better, we also explore the pros and cons of day trading versus swing trading.
When it comes to choosing the right trading strategy, there are several factors one needs to consider in order to select the right path. Some of these factors include time and personality among others.
Before getting into the technical stuff, let’s first talk about the subject matter of this post – swing trading and day trading . If you’re a complete newbie, you might not even be aware of what is day trading and swing trading. So, let’s cover that first.
What is day trading?
Day trading is also known as ‘Intraday trading’ it is a type of trading strategy where traders Spend almost all day trading. Day traders will enter and exit multiple trades the same day. Day traders typically do not keep any positions overnight. As a result, they are able to place more traders a day for small profits.
What is swing trading?
Swing trading is different from day trading because when swing traders trade, they leave their trades running for more than a day. Swing traders hold positions for days, weeks or even months, usually using longer timeframes like daily, weekly and monthly charts.
One of the primary differences in the day trading vs. swing trading is the length of time traders wait to close positions. Day traders quickly buy and sell currencies on the same day.da traders close all positions the same day. Swing traders, on the other hand, typically hold position for several days, weeks or even months.
When it comes to choosing between day trading and swing trading, the best way is to evaluate the advantages and disadvantages of the two and determine which technique fits your trading personality. Let’s take a look at the advantages and disadvantages.
Advantages of day Trading
- Day traders can make money a lot faster than swing traders.
- Day traders avoid the risk of leaving their trades running overnight to avoid unexpected events.
These are the only 2 main advantages of day trading I can think of…
Disadvantages of day trading
- Day trading is a full-time job that requires a high degree of concentration and intense focus therefore a trader must quit his day job.
- Day traders must have a lot of money: since day trading is a full time job, day traders need to have enough money not only to start trading but also need to set aside enough money to cover your living expenses while you get stated.
- Stress levels are higher compered to swing trading.
- day traders have to spend hours in front of a computer everyday and that is not good for your health.
- Large losses can be made: As a day trader, you put your trading account into a lot more risk by taking many trades on a single day therefore you can lose a lot of money in a very short period of time.
- Day traders trade a lot therefore their transaction cost are much higher because of the spread.
- Day trading is time consuming.
- Day trading has Low risk:reward rario.
Swing trading pros
- Can be done part time- Any person who have full time jobs or can’t trade full time can still participate in the financial market.
- Trading transaction costs due to spread are much lower than that of day trading because of less trades placed.
- Swing traders have a lot more time to analyse trades because they use higher time frames.
- Higher risk:reward ratio: Profits made a much larger than in day trading because you let your trades run of more than 1 day so the chance of increased profit much greater than in day trading.
- Does not have to be a full-time job. Anyone with knowledge and capital can swing trade.
- No need to be glued to your computer screen all day. Swing traders spend 20 minutes or less a day analysis charts.
- Expensive investment not required. Swing trading can be done with just one computer and conventional trading tools. Also since day trades look to grow their trading account slowly over a long period of time, they can start small and grow their accounts over a long period of time.
- Does not have high-stress levels
So which strategy do you prefer day Trading Or swing trading?
IIs day trading or swing trading more your style? I have given you the advantages and the disadvantages of day trading as well as swing trading. You can make your own choice according to the information given above.
You can consider day trading If you want to trade forex full time using lower time frames, if you are willing to sit in front of your computer and making quick decisions.
Consider swing trading, if you want to trade forex part-time using higher timeframes.
But in all seriousness, for me, I prefer swing trading because Swing trading is much less stressful than day trading. I prefer swing trading because i am looking for trading setups that are most likely to move hundreds of pips per trade than 30 pips per trade and swing trading provides that opportunity.
I also started as a day trader. However, it was stressful and time-consuming, I would make money on a trade and then give it right back. I just couldn’t grow my trading account.
After blowing up 3 trading accounts, it became very clear to me that I am never going to grow my account trading this way. So, I was left with two options; it was either I quiet trading at all or I try a different approach to trading or i was going to lose all my money.
This was when I decided to switch from day trading to swing trading and I began looking into higher timeframes charts and taking a lower-frequency approach to trading. I began focusing on the daily chart and trading less often. I also decided to only focus on both major and manor currency pairs and It turns out it was far less time-consuming, less stressful but most importantly I begin to see positive results.
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