Day trading has a higher return than swing trading, but how?

[iBelgium]

I read different articles that claim that on average you make more money than swing trading. At first, this sounded understandable since day trading costs more time. But looking for example at the current uptrend, I don't see how day traders beat swing traders.

As a swing trader, the best case scenario is buying the support at 1820 and still holding it today at 2100. So that's a profit of 15,38%.

Now as a day trader you can compound your daily profit. So a daily profit of 0,30% in 49 days would result in the same total, but if you have a loss you compound that as well. And day traders pay much more commission and can't profit from overnight gaps.

I also understand that day traders use leverage, but nothing is stopping swing traders from also doing that. The maximum leverage will probably be lower since swing traders hold their positions overnight.

Can anybody explain how day traders make more profit? Is it possible to have a daily profit of 0,30% on a consistent base? Do day traders use profit targets cause I don't see resistance levels at the start of an uptrend?

 

[Rashid_G.]

That is a convenient chart for a swing trader. Good day traders theoretically STILL make money in sideways markets.. How did swing traders do in 2015 compared to day traders?

 

[ETcallhome]

if orders entered and exited are good, Day Traders make more than Month Traders, And Minute Traders make more than Week Traders, And HFT Traders make more than Day Traders. It's just math, since there are more turning points for good entries and exits. It's simply a matter of "good" entries and "good" exits. Once you have that down you can make more by trading quicker, but by then you have so much money it becomes a bother to buy and sell all the time.

 

[qxr1011]

Can anybody explain how day traders make more profit? I

what is more ? what is less?

profit per trade? per year?

daytarder (considering he knows what he is doing) takes the less profit per trade than anybody (assuming that "anybody" also knows what he is doing)

but daytrader makes a lot of trades

so proper comparison of traders is not how much they make, but how much they make per trade per time after statistically sound number of trades (say 1000)

 

[OddTrader]

Some traders simply prefer/choose lifestyle with swing trading.

 

[ETcallhome]

Some traders simply prefer/choose lifestyle with swing trading.

Great advice.
1. First choose the lifestyle you want
2. Assess how often you must trade to acheive that lifestyle

For instance if your perfect lifestyle as a trader involves trading often then that is what you must do to acheive your trading often lifestyle.

If your perfect lifestyle involves only trading rarely, then that is what you must do to create your perfect trading lifestyle.

It has nothing to do with performance. It only has to do with how much money you have to maintain what in your mind is a perfect trading lifestyle.

Some people buy yachts and mansions. Some buy a trading lifestyle. Both are very expensive.

 

[qxr1011]

Some traders simply prefer/choose lifestyle with swing trading.

the real choosing happens much earlier - when one decided to become a trader

and the problem the wannabe trader faces when making that choice is not only the lack of money or talent, it is the lack of time

most wannabes just do not have enough time to make those tens of thousands of trades on daily chart necessary to develop a method.. they will die sooner, just physically die sooner than becoming a trader...

so if one wants to become a trader he must choose the shortest timeframe possible

or compensate for the lack of time with his unbelivable talent - learning faster, much faster than everybody else

 

[Laissez Faire]

Theoretically, the profit potential from day trading is substantially bigger than swing trading since the sum of the daily swings greatly outnumber the span of any given trend. However, succeeding as a day trader is infinitely much harder than being a swing trader, so you're probably best of not considering it. It won't be worth your while.

 

[ETcallhome]

the real choosing happens much earlier - when one decided to become a trader

and the problem the wannabe trader faces when making that choice is not only the lack of money of talent, it is the lack of time

most wannabes just do not have enough time to make those tens of thousands of trades on daily chart necessary to develop a method.. they will die sooner, just physically die sooner than becoming a trader...

so if one wants to become a trader he must choose the shortest timeframe possible

or compensate for the lack of time with his unbelivable talent - learning faster, much faster than everybody else

and my shortest time frame is infinity. Anything less than that is just gambling.

Time is everything. Price is just a score reported on a timely basis.

 

[qxr1011]

succeeding as a day trader is infinitely much harder than being a swing trader,

i do not think that swing trading (or even longer term trading) is any easier than day trading, it just creates an illusion in wannbe's mind than he knows what he is doing by extending the time of the eventual failure

with daytading it over much sooner, that is it

wannabe should start trading on paper , and if he is honest with himself it may take many years before he will be ready to switch to real money trading

the more of the paper - the cleaner the one's ass (Ukrainian proverb)