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Swing Trading vs Active Trading – Which style is better for you?

Swing trading:

Swing traders hold a particular stock for a period of time, generally a few days or up to two or three weeks, and they will trade the stock on the basis of its “swing,” or the movements between optimism and pessimism.

facebook 39The key to successful swing trading is picking the right stocks.  Usually, the right stocks are those that are the most actively traded stocks in the major exchanges.  This is because in a highly active market, these stocks will swing between high and low extremes, and the swing trader will ride the wave in one direction for a couple of days or weeks and then switch to the opposite side of the trade when the stock reverses direction.

There is more risk to swing trading in the sense that you are holding positions for 2+ days to months.  So if something happens whether it is political, such as presidential speeches or elections, or natural, such as earthquakes – these can affect your positions.

On the plus side, commissions for swing traders are less costly for swing traders than those for day traders because you will be getting in and out of trades much less frequently.

day trader vs swing trader

Day Trading:

A day trader will hold a stock anywhere from a few seconds to a few hours but never more than a day (generally less than 6.5 hours).

Being a day trader requires a tremendous amount of focus and attention as you are trading on the day’s gains or day’s losses, depending on if you are going short or long. All of the up and down movements can happen within seconds and minutes (as opposed to days, weeks, or months), so you need to be able to devote yourself to watching the rapid movements of your stocks.

Being a day trader also involves less risk because you are not holding the stock overnight – there are many things that can happen that can cause the stock to plummet.  But when you are in and out of positions within a 6.5 hour position (unless you are trading pre or post market), you do not have the risk of holding positions overnight. day trader swing trader 2

Commissions, however, are more expensive. On the other hand, as far as compounding your earnings goes, as a day trader you can collect your earnings at a much faster rate, whereas a swing trader may have to wait up to six months before he or she exits a position to gain earnings.

As a last note, the other option is to be a hybrid trader, i.e., to switch between being a day trader and a swing trader. You can be both, but one has to be adaptable to market conditions.  Certain conditions call for swing trading, and yet others are suited to day trading.  As long as you keep your eye on the market and continue gaining experience, you are able to do both.

Why is it so crucial to practice simulation trading before live trading, and how long should one practice for before going live?

Individuals across the nation and across the world work very hard to earn an income, pay bills, pay a mortgage, pay for children, etc., but what is even harder is to put aside for savings. And when that savings account gets to be a certain amount – large or small – who doesn’t think about wanting to invest it and potentially double it, maybe even triple it, in the lucrative world of investing?  And that is possible! So while we at DasTrader.com are an elite stock trading software company and very much want your interest and business, there are a few tips to consider when getting involved, as your success is ultimately ours as well:

practice 2  First and foremost, practice, practice, practice!  In order to be successful at trading stocks, one has to become experienced with how to trade first.  There is so much involved with trading stocks that one has to learn how they behave, and also how to deal with loss.  Stocks go up and down inevitably, that is their nature.  So by practicing in a real simulated environment where you can invest in those companies you believe will go up or down (depending on your strategy), you will be able to see just how well your strategy works before putting your hard earned capital into the markets. 

 In order to help our clients become more successful, we offer free educational resources which include a series of YouTube videos to help you become proficient with using the software and which you can find by going to https://www.youtube.com/user/dastradertv.  In addition, we offer FREE live webinars: Intro to DAS every Wednesday 4:00PM-5:00PM EST (GMT-5:00) with educators covering a variety of topics and time available to ask questions at the end.  Please click the link http://www.dastrader.com/form-webinar.php to register for our regular weekly webinar, or to request a one on one session. Time slots available for one on one sessions are weekdays 12:00-16:00 EST. (GMT-5:00).practice

 Additionally, there are the technical aspects of trading, i.e. what to trade: what type of trader are you?  Are you a day trader, a swing trader, position trader…? The list goes on.  (And, in another article we will cover in greater depth the differences between them).  But again, by using the simulation mode you are allowing yourself the time and practice to figure out which strategy works best for you.  (For a brief look at the differences between the aforementioned trading strategies, check out: https://www.bigoption.com/blog/active-trading/).  

Lastly, how long before you’re ready? Experienced traders will tell you that it does take between 6-12 months (sometimes more) of training before you are ready to go live.  So if you are serious about wanting to double or triple that savings account, consider practicing first.  For more information about subscribing for a simulation account, or for first time users with permission for a free 14-day trial, visit www.dastrader.com and click on the “Subscribe” link.  

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