- Day traders typically buy and sell securities within the same day (even multiple times per day) while swing trading involves making trades over a few days, weeks, or months.
- Day trading may be a good choice for those who want higher profit potential while swing trading may suit those who want a lower-stress option.
The main difference between swing and day trading is the time frame.
- Day traders work with a short time frame while swing traders work with longer time frames.
- Swing trading is better for traders who are patient. Like you. 🙂
Timing of trades can significantly impact strategy and profitability.
- Day traders open and close multiple positions within a single day.
- Swing traders take trades that last multiple days, weeks, or even months.
How do you choose between day and swing trading?
- Stress: Day trading involves more stress.
- Pace: Day traders enter (buy) and exit (sell) at fast pace.
- Day trading requires more focus for extended periods. This may be hard for you.
- Swing traders have more freedom because they spend less time than day traders.
- Swing traders harvest gains (instead of waiting for more gains that may turn to losses).
- True, swing traders may miss bigger gains but their gains all locked in, banked.
The Bottom Line
- One trading style isn’t better than the other; they just fit differing needs and personalities.
- Choosing day or swing trading comes down to your preference.
- Day trading has more profit potential given the higher frequency of trading.
- But it requires more time and effort. More stress. Less Netflix.
- Day trading is best for excitement of harvesting and enjoying profits, albeit small gains.
- If you are employed, burdened with school or are raising of young kids, choose swing trading.
- Tip: Open a demo account and test multiple trades before going live with real money.
- If you are a beginner, choose swing trading to get your feet wet.
Personally, I started as a swing trader, moved to long-term as my CPA business grew and demanded much more time, then switched back to swing trading after I retired. I have more time now and would rather harvest small gains rather than gamble losing it in these volatile times..
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation.
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He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to email@example.com.