The stock market can be an easy way to make passive income if you know what you're doing. (Image via Pixabay)

The Difference Between Day Trading and Swing Trading

Both involve the stock market, but one involves a lot more stress.

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Both involve the stock market, but one involves a lot more stress.

If you are thinking about learning more about stock trading, then two key terms that you will come across time and time again are day trading and swing trading.

Many people get confused and think the two concepts are the same, when they are actually very different forms of trading. Below, I’ll walk you through the main differences between the two.

How Risky Are They?

One of the biggest differences between day trading and swing trading is the risk factor. Day trading is the riskier of the two trading methods, and you can end up in debt a lot faster than with swing trading.

When you are day trading, you are using margin to try and make a profit. While this gives you more money to spend, it also gives you a lot more money to lose. The world of stocks is constantly moving, and if you do not know what you are doing you can lose money very quickly.

When you are swing trading, you do not have to worry as much about ending up in debt or stressing about margins. There are not as many opportunities to lose money, but the enterprise is certainly not risk-free.

When you start trading with little knowledge about the industry then you are essentially gambling, which is why it is so important to learn all that you can on day trading vs. swing trading.

Spending Time on Them

Day trading can change completely within minutes, so you will need to ensure that you have hours to spare to focus. Positions have to be constantly monitored to ensure that they are still profitable, but with swing trading, the time frames are longer, which gives you some extra time rather than having to monitor continuously.

So, if you have a full-time job and want to do trading on the side, then swing trading is a far more attractive type of trading. With it, you can learn how to make a profit from trading but won’t have to dedicate your whole career to it.

Initial Costs

One of the biggest differences between day trading and swing trading is the cost. Swing trading can be done without much money needed to start; instead, all you need is a laptop and some trading tools.

Day trading, however, requires a lot of high-tech software and the very best technology, as you are competing with high-frequency traders and hedge funds.


Finally, there is no doubt that stock trading is a stressful job. However, the stress levels between these two types of trading are quite different.

You can probably already guess which is the more stressful: day trading. You must be extremely disciplined with day trading and monitor the markets at all times. While there is still stress associated with swing trading, there is not as much knowledge required to get started.

While day trading and swing trading both involve trading on the stock market, as you can see, they are very different strategies. Choose the one that you think will work for you and that you feel you will be able to cope best with.

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