|Day Trading Vs. Swing Trading: A Detailed Comparison|
|Day Trading||Swing Trading|
|Day trading activity, which involves buying and selling securities, ends in a single day.||Swing trading activity can be carried out over a span of many days.|
|It is a purely technical call and is done after studying analytical charts perfectly.||It is done after studying the trends in the stock markets and strategies are developed accordingly.|
|Due to the high number of daily trades involved, the associated risk is considerable.||It is less risky, in comparison to day trading, and your income depends on how good your strategies are.|
|Intraday trading is extremely stressful and you are required to keep a keen eye on the market every minute, to get your trades right. This means it is a full-time job.||It is less stressful, since it can be done along with your regular full-time job by sparing some time.|
|It is difficult to learn and very few people are able to work as a professional day trader.||It is comparatively easier to learn, and the probability of success in this type of trading is high.|
|Since they are not bothered by long-term company prospects, this type of trading has reduced risk, as traders don’t hold on to shares for long.||Swing traders might have to hold on to their stocks for a longer time which can increase their risk in case of bad market news.|
|Traders do their business on a small profit margin and have strict stop losses to lock their profits in time.||Traders look for high changes in stock prices and sell when they get the best valuations for their securities.|
|They pay more commission or brokerage because of high number of trades every day.||They generally pay much less commission or brokerage as compared to intraday traders because of less number of transactions.|
|Reaction time is very less. So, sharp reflexes and great presence of mind is required.||Reaction time is more and hence deep knowledge of market fundamentals and patience is required.|
|Day trading is recommended to people with ample experience in the capital markets and a high risk-taking ability.||Swing trading can be done by beginners as well as experienced people in the market.|
The above table must have given you a fair idea about the differences in trading styles. However, apart from the difference, I would also like to list down some strategies for stock market trading using the above mentioned ways.
- Technical analysis is important for traders. So, you should learn the basics of these trading types thoroughly from a professional.
- There is some amount of risk associated with these type of transactions. Ergo, you should not make huge investments at one go.
- Avoid creating leveraged positions in the market.
- Strike a perfect balance between fear and greed. Book your profits when you have a fear of a market collapse, and be greedy when the valuations are right.
- Trade in the market actively to understand it properly and gain quality experience.
With a hope that this comparison assists you in achieving your goal of wealth creation.
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