Day Trading vs. Swing Trading
What is Day Trading?
The actual definition of a pattern day trader is someone who buys and sells the same stock in the same business day 4 or more times in 5 consecutive business days. Once in awhile you will execute a day trade just because you either get stopped out of a stock or you stumble across a huge gain. That is fine as long as you do not do it more than 3 times in any given 5 business days.
The point of day trading is to basically grab quick upswings in a stock and then grab the profits and turn them back into cash before the day ends. If penny stock investing is a junior level course then day trading is a senior level course that most seniors will fail.
First of all, to be a true day trader you have to keep a minimum balance of at least $25,000 dollars in your brokerage account. This probably eliminates most of you already no offense.
Secondly, unless you can sit at your computer all day monitoring stocks from open to close you will lose the day trading game. Day trading is a professional investors game not a basic investors game. If you are interested in trading stocks in a more active manner it is better to learn the art of swing trading.
What is Swing Trading?
It depends who you ask. Some say 2-3 days others say 2-3 weeks. I say it is 2-5 days and this is what I tend to do the most in my own trading.
This method of trading, in my view, is basically the idea of grabbing the quick upswings in a stock right after a slight pullback. Read all you want about investing strategies; but, in my opinion, it comes down to looking and learning how to read simple chart patterns. As you go about learning how to trade you will read about all different kinds of technical analysis and oscillators and some will be helpful at times; but most, in my opinion, just cause more confusion than assistance. Once you begin to understand how stocks move in relation to moving averages on a chart you will have a much better grasp of the concept of swing trading.
If you want the best "chance" of actually making money investing in the stock market on a regular basis; then, in my opinion, this is the best method of trading to master. This is because when you buy and hold a stock you not only catch the upswings in the market you also catch the downswings. Swing trading is basically trying to eliminate all the downswing portions of trading and grabbing all the upswings.
Is it 100%?
NOPE! You will have success and failure. More failure in the beginning and more success as time passes.
For more information please visit: http://www.lucky-dog-investing.com
Author: Chad Surges/
Degree: Bachelor of Science (Business)/
Career: 10 years as a Logistics Executive
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