Swing trading and day trading seem very similar. And, in many ways, they are. However, there are various key differences between these trading strategies you should know about. Below, we cover how day trading and swing trading work, and how to decide which approach is right for you.  

What Is Swing Trading? 

Swing trading focuses on short or medium-term price “swings”, or changes, in the marketplace.  

The goal is to buy an asset, hold it for a day or two, and sell it at a profit. In other words, you’re trying to identify when to enter or exit a stock position within a short timeframe.  

• Successful swing traders look to capitalize on small fluctuations within a relatively short period. 
• Swing traders will hold stock at least overnight. However, it’s more common to hold for a few days, a week or even a month.  
• You may hold stocks for months, or longer, but trading on long-term trends is more akin to traditional investing.  

Can swing trading be profitable? Absolutely. It all comes down to your holding position strategies, your risk appetite, and how well you know your marketplace.  

Swing Trading Pros 

There are a few upsides to swing trading. 

• You don’t need to check your trades repeatedly, so it’s less time-consuming than day trading.  
• Traders don’t spend too long in one position, so you can make relatively quick returns. 
• Swing traders still trade frequently compared to long-term investors. Gains can soon add up.  

Swing Trading Cons

Just as there are plus points, but there are cons to swing trading.  

• The low time commitment means you won’t have as many opportunities to trade as day traders. 
• There’s a risk of overnight price shifts which do not go in your favor.  
• Although you hold stock for a few days or weeks, you still miss out on long-term price moves. 
• Swing trading can be more technical than some other trading styles, so it’s challenging to learn. 

What Is Day Trading? 

Put simply, day trading is what it sounds like: trading which takes place over a single day. As with swing trading, you’re looking for trading opportunities over a certain timeframe. However, you’re focused on fast trades – often within just a few hours or even minutes.  

• Day traders usually exit their positions by the time markets close for the night. 
• Day trading requires focusing on intraday, or micro-level changes in stock positions.  
• Traders can buy or sell multiple stocks within a trading day. It’s a high-volume trading style. 

Is day trading profitable? As with swing trading, it can be very lucrative depending on your chosen market and level of experience.  

Day Trading Pros

The main upsides to day trading are: 

• Since you close your position at the end of the day, you’re not exposed to overnight market risks.  
• It’s a highly engaging and stimulating way to trade. No two days are ever the same.  
• You can capitalize on short – but significant – price shifts.  

Day Trading Cons 

As with any trading strategy, day trading has its potential drawbacks.  

• Day traders must trade frequently during market hours to make a profit. There’s a significant time commitment involved. 
• You won’t have the opportunity to take advantage of longer-term price fluctuations. 
• Trading should be enjoyable. But some traders find day trading very stressful. You need the right mindset to handle day trading.  

Day Trading vs. Swing Trading: Key Differences 

We’ve covered how day trading and swing trading work, and the pros and cons. Here’s a summary of the main differences so you’re clear on what makes each trading style unique.  

• Day traders close their position at the end of the trading day. Swing traders hold their position for at least a few days.  
• Day trading means making multiple trades within a few minutes or hours. Swing trading requires a more technical execution of fewer trades. 
• Swing trading requires more patience than day trading, and you need a higher tolerance for risk.  

Day Trading vs. Swing Trading Profitability

What’s the profitability potential for swing trading or day trading? Let’s keep it simple:  

Day trading and swing trading can be profitable. But day trading may have higher earning potential.  

Think of it this way. Day traders make multiple trades within market hours. They’re taking advantage of price shifts every minute, every second of the trading day.  

The result? A higher possibility for returns.  

Sure, there’s market volatility to consider. After all, no trade is without risk. You can always lose more than you earn. And you need a thoughtful risk management strategy.  

But day trading can be a lucrative strategy in the hands of a skilled trader.  

Day Trading vs. Swing Trading: Which Is Right for You?

If you’re undecided as to where to position yourself, here are some points to consider.  

• Day trading can be exciting due to the fast pace. However, some traders may find this intimidating and prefer the slow pace of swing trading. 
• What’s your appetite for risk? Swing trading can result in greater losses as you hold stock for longer periods. As such, you need a higher tolerance for risk.  
• Day trading suits traders who want to trade full-time. Swing trading might be preferable if you only want to check your trades a few times per day. 

Maven Trading supports day and swing traders. We’re here to help all traders shine, no matter their preferred trading strategy, as long as they stick to our trading regulations. Don’t hesitate to contact us to learn more about our account features!  

Choose Your Trading Journey at Maven Trading

Are you ready to discover your trading potential? Then Maven Trading wants to work with you!  

At Maven Trading, we help talented traders grow, flourish, and succeed. We offer simulated funded accounts, ongoing support, and access to advanced trading tools. Choose an instant funded account and start right away, or try our challenges – your journey is yours to forge.   

Whether you’re a swing or day trader, choose Maven Trading. Make your choice today!