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Day trading verses swing trading

Nick Goold

Many books and internet articles advocate different types of trading strategies. Deciding how to trade and what trading strategy to use is not easy.

First, choose the period for which you want to trade. There are three types of trading strategies: short-term, such as scalping or day trading; medium-term, which is usually once a week; and long-term, which is aimed at large market fluctuations once a month.

Short-term trading is also known as "day trading," in which positions are closed out during the day. Scalping, in which entry and settlement are repeated within a few minutes, is also a type of short-term trading.

Medium-term trades are those in which positions are held for hours or days, while long-term trades are those in which positions are held for weeks or years, both of which are known as swing trades.

This article discusses the benefits of short-term trading techniques in various time frames.

Mental control:

Trading is about taking risks with assets to earn profits. No strategy can be successful all of the time. There is always risk involved, and the outcome of a trade is always stressful for the trader.

Even small positions can be stressful to hold, so the shorter the time a position is held, the less stressful it will be.

Market analysis:

Successful trading involves finding potentially repeating patterns. However, there are many reasons why the market may move against your predictions: For example, the release of economic indicators, the entry and exit of institutional investors or major changes in the relevant markets.

Day trading offers the option of holding a position for a shorter time. This reduces the risk of unpredictable and sudden changes that might affect the positions held. 

Profitability:　

Day trading is often perceived as risky, but mostly that's due to poor risk management and failure to follow trading rules. Day trading offers more trading opportunities than long-term trading, but care should be taken not to overtrade.

Day trading involves capturing smaller price movements compared with other periods, so following your risk management rules is key.

Trading style

Market price fluctuations allow traders to profit. There are different trading styles, which depend on whether the market is trading small price movements or large price movements. There are four main trading styles: scalping, day trading and swing trading.

Any trading style can be successful, but it must fit your personality and lifestyle. To find the trading style that works best for you, try all the styles first. You should choose the trading style that is the least stressful for you.

Once you have found a trading style that suits your personality and lifestyle, work on mastering it. Different trading styles require different skills. Focus on one trading style and hone your skills.