There are (at least) two classifications of active traders: day traders and swing traders. Traders in general want to maximize short-term movements. But what is the difference between the two?

Day Trading

Day traders entails creating dozens of traders in a day, based on technical analysis and complex charting systems. They want to make a living from trading commodities, currencies, or stocks by accruing small profits on numerous trades and constricting losses on unprofitable ones. Normally, they do not retain any positions or own any securities overnight.

One distinct advantage of day trading is the likelihood of gaining spectacular profits. However, only traders who are disciplines, decisive, and diligent can succeed in this area.

Day traders are self-employed. They do not work for any entity and cater to the whims of companies. These traders also enjoy flexible working schedule and can take a day off whenever needed. And most importantly, they can work at their own pace. Such traders can write off some of their expenditures for tax purposes, unlike regular employees.

What sets them apart is their love for surpassing the market and other professionals. They won’t admit the adrenaline rush they get from rapid-fire trading, but this is a huge factor in their decision to earn from trading. For them, this is more exciting than being a corporate slave or selling different products.

And not to mention it requires no education to get started. Unlike many financial jobs, day trading does not require an education or formal training to learn day trading. But taking courses in technical analysis and computerized trading may be helpful.

Swing Trading

Swing trading seeks to generate profits in a stock within one to four days. Swing traders employ technical analysis to look for stocks with short-term price momentum. Unlike day traders, they do not likely make this type of trading a full-time career.

One does not need to devote their entire time to try swing trading. Since it has longer timeframe than day trading, traders need not to monitor their positions from time to time. They can even keep a regular full-time job while trading. All they have to do is to set suitable stop losses.

But a swing trader has to allocate enough time to work out and keep trades open for a few days or weeks. This can result in greater profits than trading in and out of the same security several times a day.

Swing trading is not a full-time job, so a person will have a lesser chance to endure burnout through stress. And this can be done with just one working computer and standard trading tools.

Which is better - day trading or swing trading? Neither is better than the other. Especially for novice traders, they should choose the approach best appropriate for their financial goals, lifestyle, preferences, skills, and risk appetite.

Just remember the three Ds when trading - decisiveness, diligence, and discipline.