Swing Trading VS Day Trading

January 10, 2023

This post is an overview of Day Trading VS Swing Trading, The main differences between the two practices, and how they operate to make investors money with each.

Swing Trading Vs Day Trading

Swing Trading VS Day Trading

Different traders trade differently in the market. One could be confident that no two active trades share the same strategy, motivation, or trading style.

Though the end is always to realize a profit, there is definitely more than one way to get it for the experienced trader. The variety of such investment options is often what leads people to make a career out of trading and investment in the first place.

Despite all the many ways a person can make money off of the market though, active traders can actually be classified under two categories: day traders or swing traders.

These are terms that basically come to describe a trader's investment style and how he or she arrives at the profit all investors are out for.

That's why in this article, we'll go over the main differences and key characteristics of both style that you may, one day, decide which one are you:

Day Trading

What Is  Day Trading?

As the name would suggest, a day trader does all his or her investing in the span of a single market session.

They do this with the help of advanced tools and tactical analytics expressed in the form of charts and graphs.

By pulling together all the relative pieces of information and weighing all the likely outcomes, a trader can make strategic decisions to play the market in his or her favor.

The potentials for earning in day trading often make them so alluring among investors looking for a quick way to make it big. That being said, this is a highly risky form for trading which has resulted in its fair share of horror stories among investors who lost it all.

It takes a certain amount of know-how, discipline, and decisiveness which only seasoned investors tend to possess. Even then, many seasoned investors discourage the practice as too dangerous to be worth it.

Related: Top 10 Best Day Trading Books for 2021

The 4 Main Characteristics of Day Trading

The defining characteristics of day trading that many investors either love or avoid.

1.) Autonomy

Day traders tend to take pride in their autonomy from big brokerages and corporations. They manage their own finances and depend on nothing but their own money and their own ability to make informed decisions based on the information they have on hand. Though generally more likely to result in loss, many long-time day traders tend to identify this as their favorite aspect of what they do.

2.) Thrill

The fact that all the trading has to be done in the span of a single market session means that, by its very nature, day trading is fast-paced and adrenaline-inducing. Rapidfire trading and the pay off of larger than usual income is something that day traders become addicted to and, perhaps why they continue to trade despite numerous failures.

3.) Competitiveness

When day trading, know that you are fighting an uphill battle against other traders, corporations, hedge funds, and other high rollers that shell out millions of dollars to get the upper hand. One needs to be able to match these entities in wit and skill if one is to come out ahead. Day traders also tend to do stay glued to multiple screens and are constantly calculating prices, percentages, and possible returns. In essence, it is a life-consuming full-time job that not many people are cut out of.

4.) Accessibility

In theory, though not everyone has the skill to be a day trader, a day trader can come from anywhere. This is not a profession that requires a degree or title from an Ivy League school -- although some learning in tactical analytics and investment is deeply needed. Anyone with the ability and the qualities of a day trader can participate so long as they are prepared to accept the risks.

Swing Trading

What Is Swing Trading?

The opposite of day trading -- where the transactions take place in a span of a single day, a swing trader takes positions that can last for at least two days to a few months. A swing trader tries to identify swings in the prices of stocks or commodities and sets himself or herself up in a position to profit from it -- which could usually take up a few days.

This is not as taxing as day trading but both pose about the same types of risks -- and swing trading also has some risks of its very own. Despite that, swing traders maintain their style of trading because, unlike day trading, it allows them to have a life outside the market. Granted still quite stressful, many swing traders even maintain full-time jobs and relationships.

The 4 Main Characteristics of Swing Trading

Here are some reasons why traders either like or dislike swing trading:

1.) Takes Longer

It usually takes a few days for the position that a swing trader takes to bear fruit. This means that it takes up more time to realize a profit than day trading does. Though the potential from losses due to wrong judgment calls stay about the same. This is either a good thing -- for someone who doesn't want to be glued to multiple screens for hours at a time -- or a bad thing -- for those in it for high levels of returns as quickly as possible.

2.) Opens You Up to Overnight and Weekend Risks

Since you take up a position where you kind of have to wait and see if your predictions come true, as is the case with swing trading, you open yourself up to the certain risks of what might happen in-between market hours. When markets close for the night or the weekends, anything can happen. Things that are unforeseen and can cause you money because suddenly, your predictions don't come true. These are overnight and weekend risks and they are a constant fixture in the market that every trader just has to live with.

3.) More Relaxed that Day Trading

If you enjoy still having time for another job or not suffering from burnout again and again then swing trading might be the type that agrees with you. Though like day trading, it offers higher returns in exchange for higher risks, swing trading is not a full-time job.

4.) Easy Enough for the Average Person

Swing trading can be done from the comfort of your own home with your computer or even a mobile phone. It's relatively simple once you get your mind around its many mechanisms and doesn't require you to be constantly on the phone or pacing the trading floor while looking at numbers flashing on the screen.

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Main Similarities and Differences


  • Both types are high-risk forms of investment that can garner higher than usual rates or returns. 
  • Both also require the trader to possess abilities in tactical analytics and tolerance of high-stress situations when decisive decisions need to be made.
  • Finally, both are only recommended to be done by practiced traders who only bet what they are willing to lose.

Now on to their differences:

The most obvious difference between the two is the time they take to accomplish.

Swing trading usually makes a few transactions a week while day trading executes multiple transactions per day.

These directly affect the amount of attention required from the trader -- day trading is a full-time endeavor while swing trading is akin to a part-time job.

Another main difference between the two is the data they utilize.

  • Day trading makes short terms purchases and sales during the day. They seek to profit and gain as many assets as they can within a single trading session -- often resulting in large losses on certain days. 
  • Swing trading, on the other hand, uses data that's geared towards identifying extended trends and indicators of momentum to play the market throughout the weeks or months.

While day trading relies on state-of-the-art tools and software to manage their data and condense all the needed information to simple consumable reports, swing trading can be practiced with a simple brokerage account online or through phone calls.

Finally, the key difference between the two is how they realize a profit:

  • Day trading usually racks up multiple small gains at the end of each day that accumulates over time. 
  • Though swing trading takes longer, the potential for payoff is greater despite it being at the cost of so much more risk.

This is not to say that one earns more than the other -- a day trader can earn much more than a swing trader accumulatively. It only means that they both garner profits differently from each other.

Bottom Line

Though we have described two types of trading styles, we only loosely described two types of traders.

The truth is, a trader can be both a day trader and a swing trader if he or she wished. It really depends on what certain investment opportunities present themselves and how one chooses to capitalize on this.

It really is a case-by-case basis that dictates your investment style, along with the risks you're willing to take.

So a question of swing trading vs day trading is not a question of which is better, only which bests suits the style of investments you prefer.

About the author 

Jenna Lofton, an expert in stock trading, investing, and financial planning, combines over a decade of experience with rigorous academic training. Holding dual MBAs in Finance and Business Administration from the University of Maryland, Jenna's expertise is grounded in a deep understanding of the financial markets. Her career, which started on Wall Street, has evolved into empowering others through her insights and analyses in the dynamic world of finance.

Based in New York City, Jenna's approach is informed by her hands-on experience as a former financial advisor and her keen observation of market trends. She is known for translating complex financial concepts into actionable strategies, making her a valuable resource for both seasoned investors and newcomers to the stock market. Her commitment to financial literacy and her ability to demystify investment principles have made her a respected and authoritative voice in the investment community.

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