Day Trading vs. Swing Trading: Which is Best for YOU?



Which is better? Day trading or swing trading?

Each has advantages and disadvantages. Here’s a comparison chart to help you decide which may be a better fit for you:

DAY TRADING DEFINITION:

  • In and out during open outcry hours.
  • Use intraday charts.

SWING TRADING DEFINITION

  • Hold 2-14 days.
  • Use daily and weekly charts.

DAY TRADING ADVANTAGES:

  • No overnight risk.
  • Overnight you have peace of mind.
  • Can compound your money faster.

DAY TRADING DISADVANTAGES:

  • Requires a good attention span.
  • May need a larger account if trading stocks.
    • Ask your broker about the pattern day trading rule.
  • May be more stressful while you’re trading.
    • Need to be “quick on the draw” and make decisions fast.
  • Can lose money faster!
  • Can rack up commission costs faster.
  • Can’t do it during your “day job.”
    • Exceptions:
      • Spot Forex.
      • Trading before work.
  • Need better (more expensive) technology.
    • Computer
    • Internet connection
    • Software
    • Execution platform

SWING TRADING ADVANTAGES:

  • Can do it whenever it fits into your schedule.
  • Can take time to analyze the charts and other factors and make decisions in a more relaxed manner.
    • May be less stressful during the day.
    • Good attention span not required.
  • Don’t need the best technology so less expensive overhead cost.
  • Can profit big from overnight moves.

SWING TRADING DISADVANTAGES:

  • Potentially make less money in the same amount of time (assuming success).
    • Trading options can help you compound your money faster.
  • Exposure to overnight risk.
    • Overnight you may have trouble relaxing when you’re not watching your positions.
    • Smart to hedge with options.
  • May need a larger account because of the larger risk per trade based on the range of daily bars.

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2 thoughts on “Day Trading vs. Swing Trading: Which is Best for YOU?

  1. I would appreciate the chance to receive the exact settings for the rubber band stochiastic indicator used with the MT4 platform.

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