Which is More Profitable - Swing Trading or Day Trading?

mazotrade · May 19, 2004

My swing trading has suffered in this sideways market, but I have neither the time nor the stomach for full-time day trading.

I haven't really tried day trading long enough term to compare it to my swing trading results, which are modest but consistent. When I do day trade, I like to exploit mass hysteria like the "homeland security" momentum plays a few weeks back. Otherwise, I trade the QQQ mechanically and look for price/volume breakouts on specific equities.

I believe strongly trending (in one damn direction) days are suitable for swing trading, whereas schizoid days like today are better for day trading,

Of course, your success will largely depend on your trading style and strategies, etc.

dafugginman · May 19, 2004

i daytrade sucessfully but am really trying to move to swing trading systematically. clearly there is more money in swing trading than day trading since you can take a much bigger position without worrying about liquidity concerns. this since 10 cents of liquidity impact out of a point isn't a big deal, but 10 cents out of a 15 cent trade is.

mazotrade · May 19, 2004

I'm surprised by the strong consensus that swing trading is more profitable than day trading, since the impression one gets from reading the ET forums is that 90% of traders here are day traders.

I should clarify the following statement:

I believe A SUCCESSION OF strongly trending (in one damn direction) days are suitable for swing trading. Obviously, it makes no sense to refer to swing trading in the context of a daily or intra-day trend.

Lights · May 19, 2004

Quote from mazotrade:

My swing trading has suffered in this sideways market, but I have neither the time nor the stomach for full-time day trading.

I haven't really tried day trading long enough term to compare it to my swing trading results, which are modest but consistent. When I do day trade, I like to exploit mass hysteria like the "homeland security" momentum plays a few weeks back. Otherwise, I trade the QQQ mechanically and look for price/volume breakouts on specific equities.

I believe strongly trending (in one damn direction) days are suitable for swing trading, whereas schizoid days like today are better for day trading,

Of course, your success will largely depend on your trading style and strategies, etc.

depends on market. 2003 was swing heaven. 2004 is better for daytrading. do both.

BrianLA · May 19, 2004

I like swing trading better but it really depends on the trader's personality, trading style, and, most important, capital.

will_jay · May 19, 2004

a day trader requires more capital then a swing trader?

BrianLA · May 19, 2004

Day traders get better intraday margin but for a shorter period of time. IMO, extra capital and leverage are nice ammo to have for all traders but, at the end of the day, "can you use it to trade profitably". The markets offer them the same risk/reward odds, a day trader is as likely as a swing trader to make $$$ or blow himself up.

jpstocktrader · May 19, 2004

Quote from mazotrade:

I believe strongly trending (in one damn direction) days are suitable for swing trading, whereas schizoid days like today are better for day trading,

I agree, however maybe the swing time frame is 2 days versus the 3 to 5?

Today, over 3/4 of my watch list gaped up at open. Very few faded or filled the gap in early trading (10:00, 10:30 and 11:00) (that cliche is becoming worthless IMHO). With that being said, 2:00 p.m. on was a different story. A Swing trader with a trailing stop loss would be still at the bank filling out deposits slips.

P.S. I'm on the way to the ATM for a withdrawal (i.e. I "day" traded today).

kiwi_trader · May 20, 2004

I have to admit that I don't understand the point of view of most posters here.

The markets are fractal in nature so you get daily swings within monthly, hourly within daily, 5 min within hour etc. So if you can manage the psychological issues and have acceptable costs, day trading will be more profitable (more ground to cover in the fractals = more dollars).

If you cant deal with the psychological issues or your slippage and dealing costs are too high then you will make more money swing trading for given capital.

I assume you are using futures so that margin is not limiting your ability to take sensible risks.

MYDemaray · May 20, 2004

Quote from kiwi_trader:

I have to admit that I don't understand the point of view of most posters here.

The markets are fractal in nature so you get daily swings within monthly, hourly within daily, 5 min within hour etc. So if you can manage the psychological issues and have acceptable costs, day trading will be more profitable (more ground to cover in the fractals = more dollars).

If you cant deal with the psychological issues or your slippage and dealing costs are too high then you will make more money swing trading for given capital.

I assume you are using futures so that margin is not limiting your ability to take sensible risks.

Kiwi, I agree with you to a point. However a day-trader places an artificial time stop (end of day) on their trade. This may limit what may turn into a bigger trade if they had held over night. The very definition of "day trade" means that the risk/reward is skewed somewhat by a time constraint. This may or may not be the case with a swing trader. They are similar, but not equal, IMHO.