Day Trading Vs Swing Trading – Part 1

Filed under: Learn Forex Trading |

Screen shot 2013-01-22 at 11.11.23As this is such a large topic and there is so much to say about it, I am going to split this article into two digestible parts for your viewing pleasure. Hopefully, by the end of it, you will understand whether you are a day trader or a swing trader, and more importantly, you will know which one you want to be.


To begin with, let’s talk a little bit about ‘day-trading’. Most people will have heard about this term, and will have a general idea of what it is all about. They will deduce from the name that this involves trading every day – and this is an accurate understanding. However, day trading also involves large volumes of trades, and trading multiple times in a day by watching out for any setups on intraday charts. Day traders use the short-term timeframes in order to make their trades, and often look at timeframe as low as the 5-minute timeframe, with 15 and 30-minute timeframes being the norm. This for me makes being profitable in the forex markets very, very difficult for a number of reasons.


To begin with, on the lower timeframe charts, price is much more volatile. The market tends to chop around on these timeframes, and levels of support/resistance hold much less weigh and significance. The spreads also have more of an impact (as your stop losses will inevitably be closer), and as such, much of the potential profits are eaten away by these spreads. Therefore, in order to be successful in trading this way, one has to have a very good market edge, and to trade very high volumes of trades – otherwise; profits will only be minimal due to the nature of the spreads. Therefore, only the most skilled and knowledgeable of traders are likely to succeed as day traders (not for beginners!).


(To be continued…)

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