Day Trader vs Swing Trader: What’s Different? | Individual trading has never been more popular than it is right now.
The COVID-19 pandemic gave people more access to the stock market. Companies like Robinhood and Acorn have made trading easy.
But, although people have had more time to engage with the stock market, most are not day traders as they call themselves. Instead, they are acting like swing traders.
Well, what’s the difference between day trader vs. swing trader?
This article will tell you everything you need to know about these two types of traders. So keep reading to see which trading strategy is best for you!
Day Trader vs. Swing Trader
Both day traders and swing traders aim to profit from stock movements—they both trade stocks, commodities, currencies, and futures. Let’s take a look at a day trader vs. swing trader to see the differences.
Day traders make many trades in a single day. They hold positions for minutes or hours. At the end of the day, a day trader will close all of their positions. They also open more positions with smaller gains and losses.
Day traders use technical analysis and charting systems to calculate trades. Trading systems like KJ Trading Systems help traders to track and analyze the market in real-time.
Day trading focuses more on short-term profit. As a result, it can make a greater profit, but this is not always the case.
That is because to be a day trader, you need to have discipline, diligence, and be skilled at decision-making. Split-second decisions can be the difference between a big win and a huge loss.
Day trading requires you to be an active trader. You need to keep a close eye on the market throughout the day. It is a full-time job. You must also use trading software to participate.
Swing traders make far fewer trades. They trade multiple times over days and weeks. They commonly hold positions over days or weeks at a time too. They open fewer positions with greater gains and losses.
Swing traders analyze swings in the market that take place over a period of time. They are not looking to make a huge profit from one trade alone like day traders.
With swing trading, there is more focus on long-term investment. In the end, the profit may be greater, but you won’t see a day-to-day payoff.
Swing traders do not need to be active traders. You can trade part-time using a brokerage account. Swing trading is much less stressful than day trading.
Time to Start Trading
When it comes to being a day trader vs. swing trader, now you know the difference. Using this information, you can choose which kind of trader you want to be.
Remember, there is always a risk when it comes to investing in the market. However, by understanding these trading styles, you can trade according to your own skills and time restrictions.
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