Day trading and swing trading have become increasingly popular among strategic traders, and they each make up a viable trading strategy for short term traders. Perhaps the most important difference between the two consists in the fact that day traders tend to close out all of their positions before the end of the trading day, while swing traders generally are not constrained by this rule. Day trading is generally defined as a trading strategy in which the trader implementing it opens and then liquidates all trading positions before the close of the trading day.
The general premise of day trading as a strategy consists of actively trading during a time frame when the trader feels most alert. Day traders generally use an easy to follow trading plan that can be implemented quickly and with maximum efficiency. Swing trading differs from day trading primarily in the fact that positions can and are often carried for a longer time frame than a day.


The swing trading strategy can be described by the classic trading maxim of “Buy low and sell high” as the swing trader aims to profit from both trend following moves and subsequent corrections. Today’s Day Trader StrategyOne of the most common and destructive mistakes a day trader makes is to simply not follow their plans. The 5 Stages of TradingPsychologists have created a model for assessing how people change their behavior. This allows for the trader to watch their open positions when the market is most active and to take advantage of optimum trading opportunities and close unprofitable positions promptly. In addition, limiting trading to a set time frame during the day effectively eliminates overnight risk that can result in sharp, sudden moves while the trader is not watching the market.
Overnight risk only becomes an issue when swing traders carry positions for more than one trading day.


The key to success over the long term usually lies in the quality of the trading plan that the trader formulates to implement the strategy. Once the price has broken out of a trading range, the swing trader will often take a position in the direction of the breakout.



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