Day Trading vs. Swing Trading: Which is the Right Choice for You?
Are you looking to add a little, or a lot, of money to your bank account? The stock market is a fast-paced and exciting environment where you can make your fortune or take a loss.
Two ways to make fast money is through day trading and swing trading. What are they and which is best for you? We’ll examine day trading vs. swing trading and help you decide which is best for your financial plan.
Why not take the bull market by the horns and learn about the pros and cons of day trading and swing trading?
Day Trading vs. Swing Trading Basics
Both are fast-paced trading compared to long term investments. It’s important to understand the basics of each type.
Day trading involves making several trades during a day. You take advantage of the volatile market and make trades based on extensive analysis and charting. You make small profits on each trade but make dozens of trades each day.
With swing trading, you take a few days or weeks to identify swings in the stock market. It’s about understanding the direction of the market and stocks. You make trades every few days or weeks as opposed to daily trades.
Full Time vs. Part-Time Job
Day trading takes considerable concentration, analysis, and vigilance to make it work. It’s this reason why being a day trader becomes a full-time job.
It’s difficult to make trading decisions in the middle of your 9-5 workday. You need to trade at a moment’s notice.
Swing trading isn’t as fast-paced. Since trades take days or weeks, you can have a full-time job and still do swing trading.
You need to have knowledge of the market and the capital to make the trades. There isn’t the constant analysis and charting needed with day trading.
Day Trading Is High Stress
Day trading takes significant time and concentration. The fluctuation of the market can make or break your day. It’s a high-stress environment where you can significant gains one day and losses the next.
It’s the day trading risks mixed with the high activity that leads to burnout for many.
Swing trading isn’t as stressful. You have a secondary source of income, so if there are losses, it isn’t as traumatic. You also don’t need constant vigilance, but it helps to have a simple swing trading strategy.
Swing Trading Requires Less Technological Costs
Day trading needs up-to-date stock monitoring and trade movement. You’ll need many computers and tablets to keep track of all your trades and research. This is a significant up-front cost before you start day trading.
Swing trading uses only a single computer. Once again, this is because it lacks the high-paced nature of day trading. It doesn’t need constant research and access to data.
Which is Best for You?
If you love trading and can keep up with the constant trading and research, then you can make a living by day trading. If you don’t want to take the risks and hypervigilance of day trading, then you can try swing trading.
Day trading vs. swing trading is all about pace. Day trading is fast-paced while swing trading requires less time and effort. If you’re interested in learning more about investing, then explore our website.