What Is The Difference Between Swing Trading and Day Trading?
Swing trading, day trading and investing are different in two major ways. First, the length of time a position is held varies greatly. An investor closes their eyes, buys a stock, commodity or currency and hopes for the best in the long term. Investors will often hold for years if not longer. A swing trader holds for days or weeks and a day trader holds for seconds or minutes. The second main difference is finding the level to buy or short. An investor usually chases the hot sector or hype, buying the highs and selling the lows in panic. A swing trader will look at the chart and find an appropriate level to go long or short. The level is usually technically based and will result in quick profits in weeks if not days as the stock bounces off resistance or support. A day trader does the same thing as a swing trader but on a micro time frame, usually holding for seconds or minutes. Swing trading is the gateway to financial independence for those that work a full time job. It is the fastest growing style of trading as investors, sick of losing, look to take hold of their portfolios.
The first chart is an example of an Investor's Chart, followed by an example of a Swing Trading Chart. The final chart below shows the difference between swing trading and day trading.
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