Day Trading Vs Swing Trading – Which Is Better?

Day Trading Vs Swing Trading – Which Is Better?

Pros and Cons of Day Trading Versus Swing Trading

1) Do you have the time to be a day trader? Can you operate with a screen in front of you most of the times? (although of course this also tempts you to overtrade)

Before putting your money anywhere near this (or even paper trading it with your time) make sure you have your fundementals down. You can download the (free) audiobook Trading in the Zone: Master the Market which will make sure you have a good foundation for everything else.

2) Can you sleep at night with an open position?

3) Can you set your limits/stops and let it play out? Swing trading relies on you setting your limits and stops and then do something else. i.e. the execution is normally done automatically.

4) Do you have the capital to day trade? To make more money from small market movements you normally have to trade in bigger size.

5) Are you comfortable with risk?

Is Short Term Trading or Long Term Trading Better? Longer Term Trading vs Day Trading

The text:

in this video guys I look at day trading versus swing trading five questions to ask yourself to find out what you should be doing stay tuned hey traders and investors a very warm welcome to you thank you for joining me on the channel okay so have this age old thing that’s been going on for years and I assume is gonna go in Caroline for years swing traders day traders day traders best swing trading sparrows Reuters best swing trading is best I hate swing trading I hate whatever we know that both people can make money and both people lose money it’s about finding what’s right for you so we’ve done videos on this before but I want to kind of drill down a little bit more into this so let’s look at five questions we can ask ourselves as to try and identify whether we should become a swing trader or a day trader so the first one I’ve got his do you have the time to be a day trader biggest kind of most practical question out there is being honest with yourself and say hey do you know what can I be at the screen when the bell goes for that I’m trading the dax don’t reading the Dow whatever it may be can I be at the screen during the day can I be at the screen during the evening you need to be the screen as often as possible really it is I think it’s feasible to become a day trader and have allocated time are they open or the close all the open and the close and miss the middle part that’s fine if you have other obligations I think that’s still feasible but in reality the more time you can spend in front of the screen the more opportunity is gonna be there however it does also tempt you to over trade so that’s a demon you’ve got to be cautious of but let’s go back to the point of practicality point is can you be in front the screens do you actually have the time there’s any point saying hey you know what I want to be de try don’t read the footsie 100 when you go to a school run in the morning at 8 o’clock and the market opens in 2 o’clock you’re gonna miss the most fruitful time of the day does that mean you can’t day trade no you might be able to look at the Dow open at 2: 30 you might be able to trade that the point is being very honest with yourself not just I’ve got a few weeks coming up where I can do it hey for the next 6 months year can I actually allocate the time and resources to doing this properly ok so simple one but overlooked it’s very often people diving straight in without thinking about it right number two can you sleep a night with an open position this is something that’s a big thing big reason why people go with day trading as opposed to swing trading day trading the advantages are that hey you know what whatever happens in the day happens in the day you don’t carry anything overnight you don’t have the overnight risk you sleep well you start the next day whether you the next day whether your pride day was bad or was good it doesn’t matter you start the day with a clean slate and that appeals to a lot of people the advantages are exactly that you can sleep or not worry about any overnight risk you start the day fresh the disadvantages are you miss out on any overnight moves which can be quite significant it means you can’t run things when you get them in to have a good one if you’re closing end of the day it might be day one of a day of a six day run or a multi year trend and if you’re a swing trading that’s perfect exactly one day trading you’re taking such a small bite in mind and worth it so you’ve got to weigh up those pros and cons yourself how comfortable are you with taking overnight risk because of course if you’re trading stocks for example or even for trading in FX when that weekend comes or FX or stocks it’s just an overnight in the weekday your risk then becomes out of your control you can’t get stopped out the markets closed I’m not going to do whatever it likes of course you can do things to mitigate that but ultimately that’s the thing you have to accept if your swing trading so something to consider guys can you sleep a night with an open position now you can dial down the size to suit but it’s kind of a general thing to think about what appeals to most having that sleep that clean slate or being able to hold positions over night and over several days okay number three can you set your limit stops and let it play out so swing trading really only day trading we do use limit some of you stops but we’re much more active or watching the screen so when price gets to our level we’re more likely to be there to pull the trigger to get out the trade we’ll get into the trade swing trading however relies on you to be able to set your limits set your stops and do something else the point is a swing trading you allocate time to your research and your execution and to put your orders in should I say and the execution is done automatically for you based on your analysis and where your positions are so are you comfortable with that are you comfortable the fact that your limit is in and actually the market could just plow straight through it or you comfortable the fact that you could just miss it by a few ticks this is what happens when you have limits ending up there in front of the screen there are pros and constants a day trader might jump the gun you might over trade and the bigger things that they try to do is over trade they feel comfortable with doing analysis putting your limits putting your stops in and letting it play out regardless of what happens in the meantime then maybe swing training or something better suited for you okay number four did you have the capsules day trade generally speaking day trading can be more capital intensive obviously if you’re from the US there is a day trading pattern day trader rule where you required twenty five thousand dollars to actually day trade stock so something to consider also if you’re trading virus spread betting or training virus CFB you know day trading even though it seems like there’s less risk because you’re taking far more trades you’re going to have more drawdown generally if you consider hey I want a risk X amount per trade you can have ten losing trades over a two day period that could draw you down quite heavily so a swing trader that may take you know a year to have that so you kind of can see obviously you can suit your position site you can adjust your position size to suit your capital but generally speaking you know if we’re trying to make you know good good money out of small moves you need to use more size people day trained generally we’ll be using more size than someone who’s in a similar position swing trading purely because there’s no overnight risk because they’re only taking us for more chunks of the market so perhaps you need to think do I have the capital or what is a better question here will be what amount of capital what is my capital suit best suit me better for swing trading perhaps we can flip down its head and that’s completely wrong perhaps if you’re going to be trading five six seven eight position swing trading you need far more capital first why it stops so maybe we can consider that what is your capital position compared to a day trader how would it suit date ring how will it suit swing trading all right number five these are all practical questions by the way guys capital and time is two things that are very often overlooked English dive headfirst but in reality takes a you know sensible to step back and say it’s how much I’ve got this is how much time I’ve got now let me kind of work something or an ask one nonetheless one guy’s number five are you comfortable with risk you know the risk comes in different shapes and sizes the risk which we know the standard risk of hey the risk of the position but the hidden risk what I mean my hidden risk hidden risk of how are you going to behave and react if you’re day trading are you going to be meddling positions are you going to be constantly over trading constantly putting the trigger too much trading like some kind of addict on the stock market you know that is a dangerous thing a lot of people do fall into that category similarly swing trading are you going to keep adjusting positions are you going to meddle are you going to tweak can you not leave something alone are you always going to come out too soon are you always going to want to rotate off something into another you’ve got to be sofa we’re enough to identify where the hidden risk is we all know about risk when we put on positions we know much risk we’re gonna take if we don’t check out some other videos I’ve done on the channel and talk about actual risk for your positions but there’s a hidden risk and that hidden risk comes from how you behave in the market how you behave if you’re a day trader or how you behave if a swing trader takes a bit of self awareness a step back and look at this and maybe take sometimes do a month of day trading a month or swing trading small size to see which one suits you better but ultimately that’s hidden risk is the one that makes the difference between making big leaps in your training and your stick it’s sitting there spinning your wheels or even going backwards alright guys thumbs I feel like it’s kind of stuff I appreciate and support from you if you’re a subscriber see you next one take care bye bye you..

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Comment (6)

  1. Hi there, love the channel, learnt a lot. Any chance you could do a video discussing the EU leverage changes coming into affect on the 1st August for CFD’s? This might be what converts me to spread betting. Cheers

  2. The algorithm trading domainates the day trading business. Retail traders are not given opportunity to make money. Most of day traders lose money and their health. The winners are the big players who make money by means of organized computer trading and huge capital and high leverage. Retail investors had better do swing trading and take up other projects as well.

  3. Thanks for all the cool videos, you’ve helped a lot us new comers understand the basic and advanced fundamentals of trading. Keep up the good work we appreciate it.

  4. OVER TRADING is something we should think twice about in Day trading every every time i made a decent profit and then come again in market i lose it ,, i guess we should hit our day target and leave the screen and give the market to be more clear ,, just started to notice something u have said in this brain storming channel

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