For beginner traders it's easy to get caught up in the lingo of trading. What's better, what's not etc., and one of those items is swing trading. It's a term that is thrown around a lot with no real definition per se. What I mean is that different traders quantify swing trading based on different ideas so I will just give you what we here at Landshark Education consider swing trading.
Swing trading for us is defined as a 5-day or longer hold on any trade/investment you put on.
Now on to the next question. Which is better, swing trading or day trading? Well there is no 'right' answer to this at all. This is personal preference for many traders but I can tell you this as someone who has done this at a professional level for 12 + years that I prefer swing trading.
Why? In short-summary, I don't like to jump in and out of trades or sit at the computer all day long. Swing trading for me is less stressful because I can look at a larger time frame and price target and allow the trade to get to that point. Now, I do trade a lot of futures (E-Mini and Crude Oil) so that is more day trading but I do use swing trades there from time to time when appropriate.
In addition, I find that swing trading allows me to 'mess with' my trade less. What I mean by that is I don't have to watch it every minute of the day which means I am less prone to deviating from my trade plan and price targets. For some of you saving yourself from yourself may be a key in your personal trading development. What I have found is that swing trading for many alleviates many of the issues like over-trading and selling too early that many beginner traders have.
To the right is an example of a swing trade that I recently made.
Trade Duration: 30 Days
Trade Cost: $1,500
Trade Profit: $1,704 or 113.91%
February 20th I purchased 2 Square September call contracts at $7.45 a piece.
Total trade cost: $1,500 (2 X 7.50)
I sold that position today for $15.00 (or so) a contract for a total gain of $1,704 or 113.91%.
Why did I decide to make this a swing trade you might ask?
Well that was determined based on the stocks price chart. Based on my analysis (technical not fundamentals) I made the assessment that the stock could trade higher but would take time. Therefore, a swing trade.
I hope this article helps.