Swing Trading vs Day Trading: What’s the Difference?

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swing trading vs day trading

Wondering how swing trading compares to day trading? Decide what’s best for you, as we break down the top pros and cons of swing trading vs day trading.

Developing a winning trading system begins with choosing the trading style that’s right for you.

But especially when you are first learning how to trade, choosing the trading style that’s right for you can be a bit daunting.

There’s day trading, swing trading, position trading, momentum trading, and more.

Some trading styles involve buying and selling multiple times in the same day. This is known as “day trading” (also called “intraday trading”).

Other methods are still short-term, but with longer holding periods, such as a few days to weeks. This type of trading style is known as “swing trading.”

Continue reading, as we walk through the benefits of swing trading vs day trading to help you decide the best trading style for YOU.

Swing Trading vs Day Trading

If you tell a stranger that you are a stock trader, they may automatically assume you’re a day trader.

After all, day trading has gotten much exposure and publicity (not always positive) over the years.

Still, many professional stock and crypto traders prefer a swing trading style instead.

Below is a simple comparison of day trading vs swing trading, including the top pros and cons of both.

What is Day Trading?

Day trading is a strategy that involves buying and selling stocks or crypto within the same day.

Average holding time varies greatly, from just seconds to a full day.

Scalpers may even hold a stock or crypto for only a few seconds, focusing on a rapid number of trades with small profits in a single day. However, most day traders hold stocks for several hours within the trading day.

Day traders take advantage of intraday price and volume momentum to open and close trades in the same day. Day traders may even open and close multiple positions at the same time.

Day traders constantly scan the market looking for valid trade setups and reliable chart patterns. Their basic objective is to buy a stock or crypto moving on high momentum, then to sell it at a higher price by the end of day. If successful, the day trader scores a gain equal to the difference between the purchase and sale price.

Proper day trading is like a full-time job, as it requires constantly monitoring the market throughout the day.

What are the Pros and Cons of Day Trading?

PROS:

✔ Day trading lowers risk exposure of after-hours market news that can lead to opening gap downs.

✔ Like swing trading, proper swing trading uses a technical, rule-based trading strategy.

✔ Because day traders typically make several trades per day, it’s possible to make a large amount of profit in a short amount of time (note this work both ways if you don’t cut losses).

✔ Day traders are their own bosses. Unlike a 9-5 job, day traders have the freedom to work whenever they want, and make as many trades as they are comfortable with.

CONS:

Requires highly active trade management and sitting in front of a computer all day.

Quite time consuming. May only be suitable for full-time traders.

Day trading is physically and mentally demanding (requires quick reflexes).

Day trading requires a significant amount of capital. In the USA, day trading stocks legally requires a minimum account balance of $25,000. If you don’t have enough money saved up to make multiple trades per day, you can’t day trade stocks (note that crypto trading does not have the same requirement).

Day trading often entails a higher risk, in anticipation for a potential higher reward.

Impulsivity is common. Because day trading is such a high-pressure activity, it’s easy to succumb to impulsive behavior and buy or sell stock too quickly. This can lead to bad trades, which will ultimately

day trading vs swing trading

What is Swing Trading?

Swing trading in stocks involves buying and selling stocks over a period of days to weeks.

Essentially, swing traders take advantage of “swings” in the market’s momentum.

For example, many swing trading strategies use a simple method of buying uptrending stocks on a pullback, then selling into strength of a short-term rally.

The basic idea is to identify stocks that are trending in one direction and find a price to enter where you’ll see the most profit potential. You then set a price at which you’ll exit the trade and realize your gains.

For example, let’s say you buy HappyTimes stock after it gaps up from a blowout earnings announcement.

You continue holding the stock while bullish momentum carries it higher over the next several days to weeks.

You set a price at which you’ll sell the stock when the momentum starts to slow down.

Eventually, the buyers take a rest and the price starts to pull back from the high. You now exit the stock with a substantial profit and move on to the next swing trade setup.

Overall, swing trading is a flexible, well-balanced trading style with solid reward-risk characteristics.

What are the Pros and Cons of Swing Trading?

PROS:

✔ More relaxed approach – Since swing trading means that you’re holding stocks for a longer period of time, you don’t have to be as stressed out or anxious. You don’t have to check your stocks every hour (or even every day) like day traders do.

Perfect side hustle – Set buy and sell orders outside of market hours. Work around your day job.

✔ Longer holding periods give you more control. Swing trading means that you’ll buy stocks, hold them for a few days to weeks (sometimes longer), and then sell them.

✔ More time to research the stock – One of the biggest benefits of swing trading is that you have more time to do research on a company before deciding to invest.

✔ Flexible enough to take advantage of shorter-term technical trends in both directions

✔ Strong risk control to keep losses in check, especially when combined with a market timing system.

CONS:

Can require a bit of patience at times, such as when market is just drifting sideways for a while.

Less “exciting” than day trading—but do you really want that? Go to Vegas if you are trading for the “excitement.”

Is it Better to Swing Trade or Day Trade?

Now that you understand the benefits of day trading vs swing trading, you may have an opinion on which trading style is best.

But when comparing swing trading with day trading, there simply is no “right” answer to that question.

Rather, the best trading style is a personal decision that should be based on your own risk tolerance and patience levels.

If you dread the thought of sitting in front of your computer all day, staring at flashing symbols, then you swing trading may be a better fit for you than day trading.

On the other hand, if you prefer the fast-paced action of placing multiple trades per day (and carefully managing them), then day trading may be suitable for you. Just make sure you’re disciplined and follow strict money management rules.

I personally started out as a day trader 25 years ago, but eventually found it to be too mentally and physically demanding. That’s when I started focusing on swing trading stocks and developing the Morpheus Trading system.

Conclusion

By now, you should be clear on the most important differences between swing trading vs day trading.

Both short-term trading strategies come with their own pros and cons, as listed above.

Day trading is generally considered to be a “high risk, high reward” trading style that requires a significant amount of capital and continuous attention to the market.

Swing trading is less risky, more relaxed, and more suitable for investors who want to make a steady, longer-term profit.

In our exclusive Wagner Daily report, most of our stock trades are held from several weeks to months (depending on market conditions).

The Morpheus Trading system is designed to be completely end-of-day, giving you the perfect side hustle as a swing trader.

Regardless of which trading strategy you choose, it’s important to make sure that you’re well-informed so that you can make smart decisions.

When comparing swing trading vs day trading, both methods can be consistently profitable methods of investing—as long as you maintain discipline and control your trading psychology.

FAQs for swing trading vs day trading

Is swing trading safer than day trading?

Comparing swing to day trading, both styles can be equally “safe” if proper discipline and risk management rules are in place.

Swing trading may be perceived as “safer” because it is slower paced than day trading.

How much do swing traders make a day?

The profit potential of a swing trader largely depends on the size of the trading account—the larger the account, the more possible gains.

Broad market trend, personal discipline, and validity of the trading strategy also play a big role in how much swing traders make per day.

What Are the “Swings” in Swing Trading?

“Swings” are the short-term price movements that swing traders seek to capture when momentum shifts within an uptrend.

For example, if you buy a pullback in an uptrending stock, then sell into strength of the next wave up a few days later—before the swing back down.

Which provides a more reliable return, swing trading or day trading?

In a steadily trending market, a swing trading strategy based on trend trading may generate more consistent and reliable returns than day trading.

However, a solid day trading strategy may outperform swing trading returns in a choppy or range-bound market.

What time frames should you use for swing trading?

Short-term swing traders typically hold their stocks and crypto trades from several days to weeks.

Intermediate-term swing traders (also known as position traders) may hold stocks for up to 3 to 6 months.

Ready to start learning how to swing trade—the right way?

We have helped more than 70,000 swing traders since 2002. Get started now to receive Swing Trade Alerts and access to our professionally moderated Swing Trader Chatroom—where we teach our proven swing trading strategy to members every day.

Here’s what long-time member Catherine O. has to say:

“I am very much enjoying using the Swing Trader Chatroom. The input and feedback from the Morpheus team is invaluable. Having others to interact with who are all wanting to improve their trading skills is very motivating.”

Learn more about how to become a successful Morpheus swing trader, regardless of your experience level.


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14 comments on “Swing Trading vs Day Trading: What’s the Difference?

    1. Hey Peter,

      Thanks for your comment. Indeed, we obviously feel swing trading is the “best fit” strategy for us (for the reasons mentioned above).

      Checked out your site too. Interesting, as I’ve been recently looking more into the Australian markets and educating traders there.

      Cheers,

      Deron

    1. Hello,

      First of all, we don’t use MT4, though I imagine it is similar to other technical analysis platforms.

      As for the “best” technical indicator, it is not possible to answer that question without knowing the answer to many variables (such as your trading time horizon for starters).

      All technical analysis indicators can help increase the accuracy of your trading, but the key is how they are used together as part of a system. More importantly, it is crucial to learn and master the signals from those indicators, rather than jumping around from one indicator to another.

      For us, we focus primarily on price, volume, trendlines, and moving averages (20, 50, and 200-day MAs). Keeping it simple makes it much easier to spot key support and resistance levels on various timeframes.

      Hope that helps.

      1. Hi…thanks for the reply..I trade using 1 hour chart and i usually are scalping..so in your opinion what is the most suitable indicator for me?

      2. Well, for a simple but effective strategy, consider using the 10, 20, and 50-period moving averages on the hourly chart. When there is a crossover of the faster moving averages up through the slower moving averages, and all three moving averages are sloping higher, that is a basic buy signal. Then, you can tune your entry based on breakouts above consolidation. Our article on the chart patterns for the best stock breakouts could help you with that part.

        Again, it is impossible to explain a trading system in the space of a comment here, but that will get you started. If you really want to learn how to swing trade effectively, I suggest checking out our complete online stock trading course for swing traders.

        Good trading to you!

  1. Do you backtest strategies before launching them and if so, how exactly do you do this – what software and how do you set it up, where does the data come from, what skills are needed, how long does this phase take?

    1. Hello,

      We do not backtest strategies in an automated sense. However, our stock trading techniques are based on more than 10 years of experience (we started honing our trading strategy back in 2001). As time progresses, we simply make adjustments and tweaks to help improve the effectiveness of the system.

      If you are looking for backtesting software, I recommend TradeStation because I know a lot of traders are happy with the backtesting capabilities of their software.

      Thanks for dropping by our site.

    1. Hello JNorris,

      We do not use oscillators in our trading, as our methodology is kept simple by focusing on price, volume, and support/resistance levels. Of course, we also focus on key chart patterns such as valid bases that are poised to breakout.

      Even though we do not use oscillators, you can determine when to sell into strength when you have profits that are 2-3x your initial risk (reward-risk ratio). Also, if you have a higher batting average (50-60%), then you can sell when you are up 2x what you risked.

      Hope that helps.

      Deron

  2. Dear Daron

    I am a swing trader and been consistently following your stock picking strategy (buying into strength of 52 week high etc) but with my own exit strategy has really worked wonder with me. I cud even make 5 times of my entry price over in a year and I am not kidding here.

    Many Many Thanks and Tons of regards for sharing your knowledge.

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