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What is the Difference Between Day Trading and Swing Trading

In today’s blog I’m gonna talk to you about day trading versus swing trading, kind of the definition of the terms, as well as why one is better than the other, in my opinion. Lead trainer with StocksToTrade, Tim Bohen here. I’m gonna talk to you about the difference between day trading and swing trading.
So let’s start out with a little bit of definition of terms. So we’ll start with day trading. The idea behind day trading is exactly that. You’re in and out the same day. So say you buy a stock in the morning, you’re looking to sell it in the afternoon, and you’re not holding these stocks overnight.
Typically, this is a very short time frame. You’re looking to make quick gains. You’re not looking to maximize those gains over days and weeks. You’re looking to be in and out as quickly as possible. So why is that desirable to many traders? Well, a lot of guys, and gals, like action, you know, want quick profits.
I love day trading, I admit, I day trade regularly. But it is difficult, especially for the newer traders, for several reasons. Number one, if your trade plan, if your discipline is not on point, if you haven’t kind of evolved to where you are good at stopping out quickly or taking gains quickly, you will quite frequently get whipsawed, it’s called.

I mean, these day trade stocks, we love ’em because they can move 10, 20, we’ve seen five, six hundred percent. We’ve seen thousand-percent runners in a day before. Not infrequently, sometimes once a month, you’ll have a 500 percent runner. Beauty of that is, you can make quick gains. Drawback is, these stocks move up fast, they move down fast, and they can quite frequently scare you out.
So day trading is in and out the same day. But make sure your discipline is on point, make sure your trade plan is on point, and you’re good at taking stops and taking profits. Now, the other biggest drawback to day trading is what’s referred to as the pattern day trader rule, the PDT. Just really quick defining the terms, basically it just means that you can only day trade three times in a rolling five-day period.
So think about Monday through Friday, if you’re in and out the same stock in one day, in one calendar day, that counts as a day trade. You can only do that three times a week. So if you make a day trade on Monday, on Tuesday, on Wednesday, you literally cannot trade in that account on Thursday or Friday.

Or inversely, if you make three day trades on Monday, you’re done. You cannot make another trade in that account until the following Monday. That can be very frustrating for new traders. That rule applies if you have less than 25 thousand dollars in your brokerage account. If you have 25 thousand dollars and one, you’re not under the PDT and you can freely trade.
So if you’re new, if you’re part time, you’re gonna probably struggle to day trade, really, the simple truth is, until you get over that 25 thousand dollar point. Now, why do I like swing trading so much? In StocksToTrade Pro, I mentor a lot of new and growing traders, and many of them are under the PDT, so this rule applies to them.
The great thing about swing trading is we’re looking to make day trade-like gains in multiple days and multiple weeks. So these are stocks we’re looking to hold overnight, for multiple days, and you can still make that 20, 30, 50, 100 percent in multiple days, but you’re not stuck not trading because of the PDT.

And these stocks are typically a little higher priced, they don’t make the “crazy moves” that will scare you out as a new trader. We look for stocks that are trending up, you know, without making huge moves in the day. They don’t spook you out, they don’t make crazy moves in after hours. Maybe you’re a part time trader and you can’t stare at your screen all day.
I mean, that’s one of the biggest problems with day trading, is, you know, if you’ve got a job, you’ve got school, you got family, maybe you got all three, and you’re trading these crazy volatile stocks, you literally cannot walk away from that screen, or bad things can happen. The nice thing about swing trades, you can let ’em work over multiple days and weeks.
So really, if you’re getting started, paper trade day trading, test it, see if it works for you, but for sure definitely check out swing trading. Look for stocks that are up on news, they’re at 52 week highs, that are breaking out of those key levels, and they’re higher priced stocks, maybe 10 or 20 or 30 dollar stocks.

So that’s a quick definition of the difference between day trading and swing trading and why I think one is better than the other. If you think of it, be sure to comment below. Which do you prefer? Do you prefer day trading? Do you prefer swing trading? Do you do both? Let us know below. And then also be sure to like and subscribe and we’ll see you in the next blog.
Hey everyone, lead trainer with StocksToTrade Tim Bohen here. We’d like to thank you for reading our blogs. We really wanna help you learn, grow, and evolve and become a consistently profitable trader. We’re proud of the tools we’ve built in StocksToTrade, and wanna help you maximize your success.

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