Day Trading vs. Swing Trading

Depending on how averse they are to the risk and how long they like their trade entries to last, traders are choosing to day trade or swing trade. First of all, we need to know the difference between those two.

Day trading is simply trading where your long or short position is entered as well as exited during the same day, regardless of the outcome. On the other hand, swing trading is longer term, and takes into account market swings. The positions can last for days, weeks, or even months. Anything above that is a simple investment and does not count as a “trade” anymore.

Many people ask if day trading is better than swing trading, and vice versa. This article will try to elaborate on how both of these trading styles work and which one to pick.

Day trading

Being a day trader can be extremely profitable, but can also bring high amounts of risk with the opportunities. Day traders are trying to take advantage of the small but certain moves on the market by utilizing leverage (which trading platforms such as PrimeXBT offer).

Day trading, more than any other form of trading, requires swift and right decisions on entries and sizing of the entry, exits and stop-losses. It is much more technical and less fundamental than other forms of trading. The trades are quick, and have to be extremely precise in order to work. Day trading can be superior to swing trading if the trader is analytical, and can handle stress well.

Day trading also requires being present and knowing what happens in the market. Even though it does not mean that one should trade every day or every hour, the analysis or at least market checkups have to be done often. This form of trading takes a lot more time than swing trading, but can be a fulfilling full-time job.

Swing trading

Unlike day traders, swing traders typically handle risk a bit worse, but they have more patience when it comes to their trades unveiling. As the positions last longer than a day, there is potential for large profits on a single trade, but there are less trading opportunities in general.

Swing trading requires less technical analysis skills and more fundamental research and knowledge of macroeconomics in general. The entry points do not have to be as precise, and the timing is not so crucial, since the moves swing traders are aiming to catch are larger.

Since swing trading does not take much of the time in terms of technical analysis and constant sitting in front of the charts, it can be a fun and profitable part-time job. However, traders need to understand and use stop-losses and target levels to their advantage, as the cryptocurrencies do not sleep, and a move in each direction can happen fast. If there were no stop-losses, swing traders would be in a vulnerable position.

PrimeXBT offers a number of protection orders and stop-losses to ensure traders are safe and protected from any unwanted move.

Conclusion

Depending on the personality, people which can handle more stress, are analytical and don’t like holding their positions would be a perfect fit for day traders. On the other hand, people who like trading based mostly on fundamentals, and do not want to spend most of their day analyzing charts will take swing trading. Either way is profitable, and the choice is completely subjective. However, both of the variations of traders require a platform which will provide all of the features and options they need in order to maximize their profits and reduce their risk.