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Trading and Investing

What is day trading/ swing trading?

Yves Hofstetter1 day ago·5 min read

Day trading is the selling and buying financial tools and buying or selling them within the same day. Short-term action and lower timeframes are used to execute strategies based on indicators and trigger signals. Whereas swing trading is the buying and selling of the financial tools executing a strategy focused more on the long-term. The difference lies in how long a trader prefers to stay in a trade.

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5 reasons why you should day trade:

  1. Easy to enter — Day trading not only allows you to do what you like full-time but it also allows you to learn and see changes in real-time. This is a game-changer, learning how markets behave and executing trades daily is perfect to give you the understanding of the markets you need in order to see the long-term aspects of trading or investing.
  2. You can become independent — Day trading is a business if you think about it. If you manage to trade enough value and your execution is good, day trading might be the key to get you off your job and into a new field. But do not forget, trading is not easy, take your time learning it. You will only become successful when you practice and stay consistent with your approach.
  3. Work from wherever you like — This one sounds too good to be true, but it isn’t. All you need to trade is a stable internet connection, your laptop, and your everything else you need to be in the mindset. Trading even got easier through most of the exchanges offering Apps to download onto your mobile phone which enables you to execute your orders or manage your portfolio on the go.
  4. Day trading gets you off the idea “get rich quick” — I know, this one might sting. It is the truth, nonetheless. To become a successful trader, you need consistency, know-how, and the willingness to make mistakes. 90% of new cryptocurrency traders that just started out, end up with significant losses and no funds left after a month. Try to avoid being one of them, use a Stop-Loss, and manage your risk, if you need help with that, click here.
  5. If you can afford to lose money — The most important lesson to take away here. Be prepared to pay for your experience. Learning is a hard process, make mistakes but try to learn from them. Take screenshots, review your misjudgments, and don’t do them again.

5 reasons why you should swing trade:

  1. Less time consuming — Since you will not find yourself scanning the market all the time, you will have more time to work, do stuff with the family, or just enjoy some time off-screen. Swing trading is perfect for you if you need time off, all you need is a solid strategy and check on your investment once or twice a day.
  2. You can stay in the market for longer — Day trading needs you to set your Stop-Loss very close to your entry value which involves the higher risk of being taken out of the trade to early, swing traders can average their entry out by opening 3 -5 orders normally. However, by staying longer in the trade you increase the chance for a negative outcome and the risk.
  3. Rewards are usually way higher than day trading — Since swing trading allows you to adjust your Stop-Loss to a level that takes volatility into account too. Day traders normally use trailing Stop-Losses that take them out on the declining top of a candle. Swing traders are fine with giving back if it means that they can get more gains later.
  4. Cut out the noise markets are creating — Swing trading helps you to stay away from low timeframe charts. Hunting for news and trends is not necessary, just sit back and enjoy your strategy.
  5. Fit trading around your routine — Day trading is the other way round, to be successful you need a daily routine. Swing trading offers you the chance to plan your schedule when you check the graphs. You decide whether it is necessary to check the news for valuable information. Swing trading helps you to analyze the markets in a much shorter time since you are looking at the higher timeframes of the chart.

What is my recommendation?

Trading daily is fun and very good to get the hang of trading in general, having daily exposure to the charts and the movements of the markets will make you become a better trader. However, do not get lost in all the buzz out there. Day trading is full of people telling you what you should do and where you should invest. Keep it simple, stick to your strategy, and question everything you hear about trading. Do your due diligence and be sure that you invest in something with value. However, swing trading will help you to cut all that noise out of your trading, swing trading is the optimal way to test new strategies or prefect the ones that are already existing.

To conclude, I recommend starting with day trading, find the edge. Get yourself into it and learn what makes sense to you. There are many people out there trying to sell you something. First, find out if trading is something for you by using free material. Secondly, if you find yourself at a dead-end, get a mentor, and pay for a course. It is well worth the price if you find the trader that suits you best. I always imagine myself swing trading with 60 when I can’t be bothered looking at the charts anymore, that doesn’t have to be that way, swing trading is worth trying out as soon as you got your fundamentals right. It might be even perfect for you!

If you want to find more educational material covering trading, investing, and the economics of Bitcoin, check out my blog and subscribe to my email, I will be posting all my knowledge and experience for free on there.

By Yves Hofstetter

I am the Owner and Founder of Yves talks Bitcoin. My goal is to provide sensational input and educational service to traders and investors all around the world. This blog will focus on trading and investing in cryptocurrencies with an emphasis on Bitcoin.

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