Day Trading vs Swing Trading: Which is Profitable?

I hope you are doing well from wherever you are reading this post. Lately, I have been seeing questions on day trading vs swing trading.

They are questions like “swing trading vs day trading which is more profitable?”

One thing you should know is that there are various dynamics involved in the lives of a day trader vs swing trader.

It is not a simple black and white issue as one cannot point out which is better compared to the other.

The main difference between these traders is the time frames used when analyzing the currency market and entering trades for the desired currency pairs.

The trading time frame has a great impact on trading and on profits. 

While day traders are able to open and close many positions in one day, swing traders, on the other hand, engage in trades that close maybe in days, weeks, or months.  

These trading styles are good for traders depending on factors like the financial capability of traders, the market being traded, and time availability.

Let us have a good look at day trading vs swing trading in some detail. 

day trading vs swing trading

Day Trading

Day trading, also known as intraday trading, involves buying and selling of securities in one day. 

This means that a trader dealing with forex trading buys a currency pair in the morning and selling it off in that very day. 

This form of trading can happen in any market, though it happens regularly in the forex market and stock market

A day trader boasts of a high level of skills and enjoys good funding for the trading account to enable taking several positions at a time.

This form of trading allows traders to pull resources together for short term trading and gain from the prevailing price change. 

Day trading mainly takes place in highly liquid stocks and currencies, and traders strive to make as many trades as possible in a single day. 

There are no specific trading strategies that are solely designated for day trading. All traders use varying trading strategies depending on what suits their trading abilities.

There are those day traders that are going to use indicator-based strategies while others prefer naked chart price action, more so technical trading strategies. 

Read: Best Day Trading Books

Swing Trading

Swing trading, on the other hand, is something that some traders tend to confuse with momentum trading

The two cannot be interchanged since momentum trading is applicable to day traders too, given that the strength of the trend is what is given the primary focus. 

Swing trading capitalizes on identifying a market trend and capturing the trend with the objective of making profits as it lasts. 

Compared to day trading, swing trading happens overnight or can even stretch out to a couple of days, weeks, or months. 

A swing trader will only close a trade when they think that the trend they were following is coming to an end or nearing a reversal. 

This form of trading comes with an inherent risk. Swing traders have to keep their positions open for a certain period, and anything can happen in between. 

However, profits accrued by one trade can be equivalent to many trades that are taken by a day trader.

Just like day traders, swing traders have the liberty of using varied trading strategies.

The strategy a trader chooses depends more on their personality. This is why even the profitable traders at some point had to test several trading strategies to see which suits them best.

This is why I keep telling my students that there is no one trading strategy out there that can be classified as being perfect.

Just find one that works for you and develop an edge around it.

Let us check the specific differences that exist between day trading and swing trading the currency market.

Read: Ultimate Position Trading Guide

Day trading vs Swing Trading Differences

Time Frames Involved

Time frames used for swing trading differ from those of day trading.

 A swing trader will normally utilize at the very least 4-hours time frame and above. Yes, there are times when swing traders might go below the 4-hour chart, but that is not meant for analyzing the market trend.

Swing traders only use the lower time frames for precise entries after they have already identified the direction of the main trend using the higher time frames.

Day trading also tends to focus on benefiting from the day to day volatility, but swing trading focuses on benefiting from the short to medium term trends in the market.  

Leaving trades open creates some risk to swing traders in the event the market was to reverse unexpectedly. They would end up losing the profits already gained, and maybe even lose some part of their account capital.

This is not a risk that day traders are usually affected with. However, this does not conclude that day trading is better than swing trading.

Swing traders can mitigate this risk through trade management. This would involve closing some of the profits accordingly as the trade continues to move in their favor.

Market Swings

There are various risks that come with the need to trade overnight for swing traders.

Overnight trading is not as fast as day trading, and this causes wide spreads. Wide spreads could lead to your stop loss being hit. The take profit can also be hit at a different price than you expected.

There is also the tendency of experiencing erratic price action during the off-market hours, which increases the risk for swing traders.

Again, this is not something that can be used to ascertain swing trading vs day trading which is more profitable.

Day traders are also prone to volatility during peak hours, which can result in unprecedented losses.

Profit and Loss

Profit and loss from these forms of trading could vary as swing trading mainly has higher profits, which also equates to higher loss potential compared to day trading.

This means that to engage in swing trading calls for you to have a good understanding of the risks involved as well as the trading position.

You will be expected to manage your trades through position sizing and risk management as the trend continues.

Day traders accumulate their profits or losses over a day. This is to mean that by the end of the day, you should have zero positions( though not all the times). It does not make sense to close a trade that is already negative, but it has not yet hit the stop loss or close a winning trade prematurely.

The main difference in day traders vs swing traders comes in with the expected profits and losses in the continuity of a trade.

Swing traders normally have bigger stop loss and take profit levels compared to day traders. This is because when you need to target big swings, you have to ensure that your trades have sufficient breathing space.

Putting tight stop loss as a swing trader will see you being taken out by retracements or pullbacks them the market moves in your direction.

swing trading vs day trading which is more profitable

The Tendency of Overtrading

Day traders may end up overtrading, especially when the price is constantly moving in one direction for a long period of time.

Overtrading has its risks since if you are on a winning streak, you will easily become emotionally involved with your trades.

To some extent, this results in even the best traders becoming bias towards trades that do not align with their trading plans hence incurring huge losses in the process.

 Overtrading has lower risks for swing traders because a trade remains open for a prolonged period.

However, there are instances when swing traders might be exposed to overtrading tendencies, for example, when a trader has several open positions in different markets or for different financial instruments.

Trading Strategies

It is probable that the trading strategy you would implement in swing trading vs day trading is quite different.

Your personality, skills, and capital will help to determine the trading strategy to use. The fact that swing traders need to use larger stop-loss levels compared to day traders could also play in these traders using different strategies.

There are strategies that work just fine with both day trading and swing trading.

As for me, I believe that a strategy that you choose boils down to your personality. This is why you will see a certain trading strategy working very well for a certain trader, but another trader fails miserably while trying to use the same strategy.

Trading Costs

Trading has to involve costs when day trading and swing trading the currency market.

Depending on the broker that you are using, you will either be paying a commission or spread for your open positions. There are some brokers that might require you to pay both.

For swing traders, there are also the swap rates that come for carrying a trade to the next day.

This is to say that both swing traders and day traders incur trading costs despite the differing strategies that they choose to use. However, a day trader will end up paying more on commissions depending on the open positions they keep in a day.

Emotional Perspective

Day trading can be quite intense and stressful. You need to have sufficient emotional intelligence in order to trade profitably.

This is attributed to the fact that you have to keep watching the charts as the trades move in whichever direction. There will always be that aspect of second-guessing your entry decision if the trade starts moving against your direction.

A beginner forex trader might be tempted to change their trade (let’s say from a buy to a sell), yet the market was only having a pullback or retracement then continue with the trend. This can be stressful since emotions will be running all over.

Read: Trading Mistakes Made by Beginner Forex Traders

That is why I normally advise my students not to make any changes to their trades the moment they have already entered since any decision from there will be emotionally based.

Swing trading, on the other hand, does not require a trader to keep checking the charts every now and then since it is the higher time frames that are involved.

The good thing about this is that it can be done on a part-time basis even for someone working a full-time job.

Swing Trading vs Day Trading Which is More Profitable?

This is a question I have received on several occasions. To be honest, there is no black and white answer to this question. I don’t think either is better than the other.

Each of the trading strategies has its strengths and challenges.

To achieve the best as a trader, go for the trading strategy that matches your skills, time availability, capital, and personality.

Day trading needs you to be passionate about full-day trading, unlike swing trading where one has the flexibility of time, but also needs to sacrifice more time in studying the markets to see what works for them.

None of the two is easy as discipline is paramount for you to become a profitable trader.

In case you have other questions on day trading vs swing trading, feel free to shoot me an email.


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