Swing trading vs intraday trading: Choose the best

swing trading vs intraday trading

Every individual trading in the stock market wishes for maximizing his returns within a limited time span. But, not every individual manages to create profits from his investments, it may be due to a lack of strategies.

There are high chances to prevent losses and elevating the profits if one trades strategically. So, to give you a detailed review of the two most popular trading strategies that are widely accepted by traders, we have to build a very favored topic about swing trading vs intraday trading.

The topic of swing trading vs intraday trading will lead you with valuable knowledge about swing trading strategies and intraday trading strategies, also this information will help you make a wise and profitable decision between the two schemes.

But in the end, the selection between the two trading strategies will completely rely on individuals' requirements and suitability. It simply signifies that one of the trading decisions that may work for one may not work for another.

Intraday trading strategies

Intraday trading or day trading refers to buying and selling the stocks within the same trading session. The traders do not hold the stocks that were bought by them at the beginning of the trading session but sell them at the end of the day. An individual following this strategy is called as Intraday trader.

These individuals aim to create an easy profit by not relying on the future growth of a particular stock. Example: Mr. X decided to trade for 1000 shares of ABC company that costs Rs. 50/share with a focus to sell those shares, when reaching up to Rs. 52/share. Now, soon when the stock price climb to Rs. 52/share, the traders will be earning Rs. 2000 within a day.

Now, this strategy seems very easy and enticing but in reality, the trick is not a simple game. A successful intraday trade means getting a good profit which is backed by great research and analysis of a particular stock. If entering without strategic planning then there is a high probability that a person may lose his investment. Let us derive some clarity with the help of an example.

Example: Mr. X bought 1000 shares of AA company that was booked at Rs. 90/share without any study or analysis but simply aims for a good profit within a trading session. Now, at some point in time the stock decline and reached at Rs. 86/share. Instead of booking profits, Mr. X has to bear a loss of Rs. 4000 within a day.

The above examples clearly signify that entering into a trade without intraday trading strategies backed by the company's analysis may reflect loss instead of a good return on investment.

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Swing trading strategies

swing trading strategies

Intraday is performed in a surge of small profits while swing trading strategies are implemented for making small to medium-term profits. Unlike intraday, swing trading allows a trader to hold the bought stocks from 1 day to several weeks. Also, it advances an opportunity to sell the stocks at a higher price or better rates.

Example: Mr. C procured 500 shares of a company F at Rs. 100/share and instead of selling them on the same trading session, he decided to wait for a few weeks until it reached a target of Rs. 110/share.

It is completely opposite of intraday trading strategies that force an individual to devote his complete time and sell it at the right time within the same session. Let us move forward with initiating a comparison of swing trading vs intraday trading.

Swing trading vs intraday trading

Holding a complete knowledge and point of comparison between the two trading strategies would help in making a better decision and choosing the best as per the suitability and requirement of an individual.

Let us derive differentiation between intraday trading strategies and swing trading strategies (swing trading vs intraday trading) on the basis of the following parameter.

Time: Intraday or day trading requires a complete-time devotion for the full trading session as it needs the trader's attention for buying and selling at the right time for generating more profits.

While swing trading allows a trader to make a quick look over the stock portfolio every time. Unlike intraday, it does not require full-time involvement.

Return on investment: Not all the trades guarantees you a return on investment. If talk about intraday trading strategies there is a probability that a trader can make small gains/losses within a short period of time.

While swing trading strategies are less hectic and allow an individual to take a calm decision to buy and sell for a mid-short time frame with a probability of more returns i.e profits or even offer big losses.

Sensitivity: The stock market is very delicate and even a minute news statement can result in a huge change in the growth of stocks. And when individual trading as an intraday trader may have to face consequences due to some bad news. It impacts the price of the stock very badly.

While being a swing trader is less likely to get a huge impact on the stock prices because an individual can enter at the right time and exit when the stock is more stable for preventing losses and gaining a good return on investment.

Take away

Stock markets are volatile in nature and it is good to introduce our investment for buying stocks at the right time and sell them at the right time after a complete analysis. One can go for intraday or swing trading after knowing his requirements and suitability.

There is no hard and fast rule that which trading strategy is better between intraday trading strategies or swing trading strategies. The above comparison of swing trading vs intraday trading is done to give a glimpse to trading aspirants for making a valid choice between the two.

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