Are you a 9-to-5 job holder and confused about which trading strategy is the optimal for you? We’re here to assist you in this matter. We’ll go over the details of both swing and day trading strategies, and compare them to help you decide which works great for you. The trading strategy is the technique by which market advantages are achieved. There’s no way out of trading without it. It’s really just a set of rules that can be used to anticipate market behaviour.
Buying after two consecutive low market closes and selling after two consecutive high market closes is one possible trading technique. It might be just about any rule, as long as it offers some sort of advantage, or predictive power. It is crucial to evaluate how these strategies compare because, while the fundamentals of each remain the same, market conditions and trading environments are always changing. So, let’s know about these strategies.
What is Swing Trading?
Swing trading is a strategy where positions are held for a few days to a few weeks. Swing traders anticipate short- to medium-term market trends and use technical analysis to timing their trade entries and exits for maximum profit. Stocks and exchange-traded funds (ETFs) tend to be among the least risky investments they make.
Perks Of Swing Trading
- Less Time: Since swing traders only keep their positions open for a few days to a few weeks at a time, they don’t have to constantly keep an eye on the market like day traders do.
- More Opportunities: Swing trading might be less nerve-wracking than day trading since traders have more time to consider their options and react to market fluctuations.
- Long term Success: Swing traders may be able to succeed than more conventional investors because of their ability to take advantage of the market fluctuations that occur over the course of a few days to a few weeks.
Drawbacks Of Swing trading
- A greater degree of uncertainty than with most long-term investments: It’s possible to actively manage positions and loss potential in a matter of days or weeks.
- Price Gaps: Swing traders are vulnerable to overnight price gaps produced by market circumstances or market announcements since they hold holdings over night.
- Longer positions: Swing traders typically keep longer positions than day traders because of the reduced frequency of trading opportunities. They might not have as many chances to trade as day traders.
- Risky: As a whole, swing trading is riskier than more conventional investment because of the potential for overnight market news gaps.
What Is Day trading?
A popular type of active trading is known as day trading because trades are opened and closed during the same trading day. Day traders often use leverage and technical analysis to anticipate and capitalise on small price fluctuations. High-volatility assets are where their attention is often directed.
Pros Of Day Trading
- Good Success Rate: Day traders can only be successful if they constantly keep an eye on the market, not just when it opens and closes but also when prices fluctuate throughout the day. They can use auto trading bots like quantum flash to monitor the trading market. This allows them to take advantage of intraday trading opportunities and succeed from short-term price fluctuations.
- Greater Potential: Due to the high volume of trades and the opportunity to succeed from price fluctuations that last only a few days, day trading has more potential than swing trading.
- Multiple Trades: Day traders have a lot of options, as they can make multiple trades within trading hours and win from a wide variety of market movements.
Cons Of Day Trading
- Extremely stressful: Day trading can be mentally and emotionally taxing due to the need for prompt decision making, risk management, and the acceptance of financial setbacks.
- Time commitment & accountability: Day trading calls for disciplined attention to the markets around the clock.
- Risky: The potential for risks when trades are made against a trader’s position makes day trading a high-risk endeavour. Day traders need to incorporate risk management into their trading plans.
Swing Trading VS Day Trading : Which One Is Better for Part-Time Traders?
If you have the correct attitude toward risk and are willing to devote yourself to closely watching the market, day trading can be beneficial. Similarly, day trading comes with more risks and significant emotional stress. Traders should think hard about their goals and risk tolerance before choosing if day trading is right for them.
The ideal trading style to impress a prop firm is the one you already use in your daily life. Swing trading will be the method of choice for many professionals and those with hectic schedules. Even while day trading offers the potential for success, it is much more difficult to win in and has a much higher failure rate than swing trading. To the same extent, swing trading may appear to be a much slower option; yet, it is easier to succeed in this area and you won’t have to sacrifice your life to do it.
In a nutshell, Day trading can be lucrative for those with trading expertise and a high-risk tolerance, but it also needs constant vigilance and focus. Ultimately, day trading on the side is like having two jobs for most individuals. It’s not good for you physically, and there’s a good chance you’ll burn out. You should give swing trading serious consideration if you can afford to lose money overnight and are comfortable with the other risks involved.
Why Swing Trade?
Swing trading is a viable option for part-time traders who don’t have much time to devote to trading. Day trading calls for greater focus, alertness, and a willingness to take on more risk. Swing trading may be done on the side and needs less attention than day trading.
Swing trading may be more manageable for beginners or those with limited time. You may get your feet wet in trading and learn the ropes without having to keep a close eye on your account.
Part-time traders may save time by doing research after the close of trading each day and placing orders just before the market opens. This is the typical process for swing traders who keep their positions open for a few days.
Things To Remember
- When picking between swing trading and day trading, it’s important to take your schedule and personal preferences into account.
- Day trading involves more risk than swing trading, so one’s risk tolerance should be taken into account.
- The key to successful trading is developing a plan that fits with your objectives and comfort level with risk. Swing trading incorporates both technical and fundamental analysis, while day trading emphasises technical analysis alone.
- Your preferences, objectives, and comfort level with risk should guide your decision between swing trading and day trading. The odds of financial market success can be improved by giving this advice careful thought.
Conclusion
Successful part-time trading is all about adjusting your research and trade execution to your existing schedule. If you work a standard 9-to-5 job, you’ll have time in the morning and evening to go over the trading charts. The average duration of each trading session shouldn’t be greater than 20 minutes depending on your strategy. Both trading strategies can be rewarding but those who want to save time or have not much time to trade, should opt for swing trading.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.
