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Day trading versus swing trading: Pros and cons

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(CNBNewsnet)(November 26, 2018)--The market of traders is comprised of individuals who classify themselves as either day traders or swing traders. The difference between these two kinds of traders is the strategy employed in the trade. For day traders, the common norm is to make and close several trades in a day. The trade, therefore, revolves around using complex analysis tools and charting systems to arrive at the right trading positions. As for swing trading, traders identify swings in the commodity of trade and thereby create trading objectives over a period of days. Swing traders, therefore, have more time on their hands and trading might not be the full-time occupation.

What are the pros and cons of swing vs day trading?

In order to properly understand the intricate details of each kind of trade, we need to make a deeper analysis of both trading methods. By identifying the merits and demerits of each kind of trade, you can be able to determine which market you are suited for. Let us start by looking at the pros of day trading.

Day trading pros

Potential for huge returns

Any conversation that is centered around day trading vs swing trading is bound to end up to the money. Any venture is worthwhile if it can generate actual profits. Day trading has the biggest potential when it comes to turning a trader into a huge success. The input that the trader invests is nevertheless the biggest determinant of the success.

Flexibility of self-employment

Day trading also gives traders the benefits of being self-employed. A trader can determine the hours they intend to work, their daily targets, how much time they can take off the working schedule and so on. This kind of freedom is rare in any kind of occupation.

Few barriers to entering the trade

Anybody who wants to get into trade can do so. Day traders do not need to have specialized skills or high education. The investment required is also minimal. Only a few sessions are needed to familiarize with the technical analysis tools and the market in general.

Day trading cons

Big risks are involved

Day trading comes with a fair share of risks. Just as it is easy to make huge profits in a very short time, it is also possible to make huge losses in a short time. Trading is indeed listed as one of the riskiest professions by the U.S. Securities and Exchange Commission (SEC). Because of the huge risk, traders are advised to learn about the different risk management strategies.

Costs are involved as traders move up

As you scale up the heights of the market, you will be required to invest in various technical analysis tools for you to make profits. The trading market is quite competitive and some of the skilled traders are equipped with the latest tools.

Financial and occupational stress

There is also a great chance of being financially and mentally strained when working as a day trader. The profession involves watching multiple screens and making quick moves in order to make money. This can quickly drain your energy.

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Swing Trading Pros

It is less involved

One of the most attractive aspects of swing trading is that it does not require a lot of time or commitment. You can plan out your trade over a number of days and you do not need to be trading every day.

Potential profits without too much burnout

Swing trading also comes with a great potential for profits over the course of time. The trade is also defined by its flexibility. Since it is not full-time, the levels of stress might not be huge compared to day trading, for instance.

Swing Trading Cons

High margins are necessary

Swing trading is all about gaining profits over the course of days. Higher margins are thus required to trade. This might lock out some traders who do not have much capital.

The risk for losses is high

Since higher margins are required to trade, the risk levels also go high. All kinds of trading come with a fair share of risk and swing trading is no exception.


As the comparisons above show, both day trading and swing trading come with their own challenges and benefits. The choice of the best profession, therefore, depends on the situation of each trader. If you have enough capital, swing trading might be the best option. If capital is a constraint though, day trading will be the obvious choice.

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