Intraday Trading versus Swing Trading

The rise of the internet, along with online trading houses and brokers, has paved the way for average individuals to try their hands on trading.

The allure of trading is undeniable, and often the new traders are in a dilemma to choose the type of trade and which one to focus on.

Based on their interest, some traders prefer day trading while others want to kick start the trading experience with swing trading.

Let’s discuss further and know the difference between these two types of trading.

Intraday Trading versus Swing Trading

Intraday trading, as the name suggests, is the practice of buying and selling stocks in a short time frame to earn short term profits. In short, it is the purchase and sale of a security within a single trading day.

Swing trading uses short term trading tactics; that is, it is suitable for traders who can see profit soon. Swing traders aim to hold a position only long enough to seize a significant advantage.

The real difference between intraday trading and swing trading is the time. Rest of the difference between the two is discussed below:

  • The intraday trading aims to close out positions before the market closes for the day. Swing trading involves an overnight hold.
  • Intraday trading is a better fit for individuals who are passionate about full-time trading. The person must have an advanced understanding of technical trading and charting. Swing trading, on the other hand, takes less time. It requires a hold for several days to weeks, which carries the risk of the unpredictability.
  • Day trading is more active, which means that you buy or short sell volatile stocks as required to take advantage of projected price movement. Swing trading may hold a position for a few days, weeks, or even months to take advantage of more massive price swings.
  • Intraday trading is more suitable for traders who are not novice traders and have significant experience in trading. Swing trading is a more balanced way of trading, & a novice trader can start his or her trading journey through swing trading, to gain experience.

Each type of trading has its pros and cons. The main deciding factor lies on you, how much time and effort you’re willing to commit to monitor the market and decide your trades.