Finance

Difference between swing trading and intraday trading

You might be wondering what is better as compared to day trading and swing trading. So, to give you a detailed review of the difference between swing trading and intraday trading we have highlighted the complete points of comparison for easy understanding.

Day trading or intraday trading is active trading that promises consistent daily profits with low capital requirements, on the other hand, slower-paced swing trading which is trading mostly on daily time frames promises much lower maintenance and time investment.

Now, if you’re a beginner then chances are that you discover trading by hearing about day trading first and that’s because it’s far more popular than swing trading. Let’s have a quick comparison of swing trading vs intraday trading for deriving some clarity on both the trading strategies.

If you are going to search for day trading on a search engine for getting an insight into how many times it’s been searched. The average number of searches per month is 428,000. While swing trading is searched 286,000 and to me, it makes perfect sense you see day trading promises things like making $100 per day every day with a capital of thousand dollars. That sounds great and easy but actually, it is really very complex.

When it comes to swing trading it typically requires a bigger capital to start with trading as a swing trader. Now, which one is actually better for you will really depend on a number of factors such as risk-taking, suitability, and time. Let us talk about swing trading vs intraday trading which one is more profitable and which one is right for you.

Intraday trading

Day trading or intraday trading is pretty simple to understand but is a bit complex to implement. You are trading intraday that simply means, you’re entering and exiting positions within the same day. You are not allowed to hold the position overnight.

Swing trading

Swing trading on the other hand you are trading for a longer period of time. So, you are buying stocks and you are not selling them the same day as you might sell them the next day, the next week, or even the next month. So usually, when you are swing trading you are holding something from one day up to a month or even two but most often it’ll be a week or two.

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Difference between swing trading intraday trading

Now, we have to see which one is better for you to do as a trader. Let’s compare with the help of some factors:

  • Time: If you are day trading it’s gonna require way more time. If you are buying stocks as a day trader then there are six hours and a half each day plus checking news in the morning afternoon you have eight-nine hours that you have to be in front of your computer each day that’s a lot of time.

Swing trading on the other hand doesn’t require too much time. Ideally require about 5 to 10 hours a week and day trading is going to be harder than swing trading because day trading is more short-term.

  • Decision: In intraday trading, stocks are very short-term in nature that leads one to undertake more risk. So, to reduce the level of risk-taking, decision-making is very advanced and critical. On the other hand, when you are buying something and you’re holding it for a few weeks you have way more time to make better decisions.

So, day trading is going to be harder than swing trading.

  • Profitability:Β If you are doing something even more short-term then you are doing high-frequency trading. This is the most important factor that we’re going to look at is profit. Which one has the potential to make you more profits between swing trading vs intraday trading?

Intraday trading might be profitable with fast-rising stocks but might not be as profitable as swing trading because swing trading gives ample time to an individual to book good profits.

Also read: Management Guru

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