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How To Differentiate Between Day Trading And Swing Trading

Author: Mohamed Fareed
by Mohamed Fareed
Posted: May 29, 2021
swing trading

Trading is not only limited to a single kind of trading. It involves various types of trading which should be considered before stepping in the business of trading. The active traders in the market are divided into two groups. The first group is the day traders and the second being the swing traders. The aim of both the group is to look for profit through short-term stock investments. These two categories in which the traders group themselves are the strategies employed in the process of money making. The differences between the two trading method are discussed below in this article. Thus, you must know that stocks that are trending currently at a price below the intrinsic level of their own company value are often known as value stocks.

The Factors That Differentiate Swing Trading From Day Trading

Time Consumption - The first important factor that distinguishes day trading from swing trading is time. Day trading requires huge commitment than the swing trading. The day traders always have to monitor their positions as they change their positions at frequent intervals. In swing trading, the time frames are longer, but at least there is room to breathe. There is a certain kind of flexibility in the Value stock which gives the opportunity to the traders to make a profit without giving hundred percent commitments to the business.

Risk Factor - The second is the risk which is significantly higher in the case of day trading than in swing trading. In day trading there is always a chance of winding up in debt when there is a loss. But as swing trading does not involve a huge amount of money the risk factor remains less.

The Startup Cost - Even when it comes to the cost while starting the trade, the money involved is much higher in day trading than swing trading. An individual can start up swing trading with a relatively small amount of money. While if they want to start day trading, then they will have to employ a massive amount.

Stress Level - Day trading is highly stressful as the trader will consistently have to monitor their positions. Moreover, it also requires an adequate amount of knowledge regarding the market. But when it comes to swing trading even the person with the least knowledge about finance to be successful.

Swing trading aims to recognize the recent trends in the market and accordingly make optimum use of the areas from where profit can be derived. In Value stock, technical analysis helps the traders to make the best use of the changes in the market which results in improving the status of their trade.

The difference between the two kinds of strategies lays down numerous options to avail from. This information would be helpful for the traders who are about to enter the market. Moreover, it will also be useful for the ones who are unable to decide which strategy will better suit their interest. And most importantly, swing trading is the ideal choice for the ones who are not looking forward to full-time trading.

About the Author

Fareed is a graduate of computer science engineering, a writer and marketing consultant. he continues to study on Nano technology and its resulting benefits to achieving almost there.

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Author: Mohamed Fareed
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Mohamed Fareed

Member since: Feb 11, 2017
Published articles: 1288

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