The difference between day trading and swing trading in forex – ForexLive

Understanding more about day trading and swing trading

Most of the time, traders
throw around forex terminology incorrectly in a way that misleads newer traders
who want to educate themselves.


A better term to
use for day trading is ‘session trading,’ as its trades open and close
within a single trading session. The trader sits down and begins flat, then
walks away flat again – with no trades still open. With that, day traders
usually leave a small portion of a profitable position to run ‘overnight.’
However, this means that it is only a tiny fraction of the typical size of the
‘daylight’ or actively managed position where it originated from.

As everyone knows,
day trading is very time intensive. It needs tight, active trading on small
timeframes like 15 minutes, 5 minutes, or even 1 minute. Also, it can become
very stressful, difficult, and challenging (and possibly very rewarding). And
during the entire trading session, it requires traders at least some degree of

In addition to
that, day traders might choose from a wide variety of trading strategies.
Still, what all day traders have in common is searching a series of relatively
small winning trades, with gains ranging from several pips to about 1.5%
movement in price as a best-case winning trade scenario. 


The name ‘ swing
trading’ is made as to its trading style because these traders are trying to benefit from an
instrument’s natural ‘swing. Instead of focusing on an exact time, these
traders try to spot the starting of a directional price movement, enter a
trade, and hold on until the movement stops out when they take profit. Swing
traders are ready to have trades open for some days or even several weeks if
the ‘swing’ keeps going on.

Usually, swing
trading is less time-intensive and practiced on higher time frames than day
trading. The most common time frame used is 4 hours, but some swing traders
will make decisions according to 1-hour charts o use lower time frames to
fine-tune entries and exits occasion.

Among the major
attractions of swing trading is that traders can practice it by checking prices
once every four hours – plenty of full-time employees can integrate into their
work and leisure time. Furthermore, swing trading needs far less time and effort
than day trading.

Then, swing
traders seek larger gains from price movements of between 1.5% to 5%, using
commensurately wider stops to account for volatility inherent to 4 hourly or
hourly price movements. Also, they tend to use trend following or support and
resistance style trading strategies, mostly supported by fundamental analysis
as they try to catch larger price movements.

Day Trader
or Swing Trader

A massive part of
this decision is not a real decision at all because economics and time
determine it. A lot of people must work full-time to meet their financial
responsibilities, and even excellent trader will sometimes report wide
fluctuations between their gains and losses over time.

So, nearly
everyone can rule out full-time day trading as a realistic possibility. It can
be that they have some time or a few hours where they can dedicate exclusively
and intensively to trading every day. But traders need to ask themselves if
this is the right time. 

Moreover, they
will encounter more market opportunities being plugged in once every few hours
consistently. After that, they will by being plugged in for some hours each.
And that is just the way market runs.

If traders really wanted to
become day traders, they would mostly master day trading once they mastered
swing trading. So, that is a clear statement of what style they must start

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