Swing trading is an active type of short-term investing. Swing traders use technical analysis to anticipate stock movement and trade based on these predictions with the ultimate goal of realizing capital gains. Unlike day trading, a swing investor purchases stocks on the market and holds them for a few days or weeks.
Swing trading is an active, short-term form of investing. It is the opposite of passive investing, which involves purchasing and holding assets for long-term profit. Swing trading stocks requires a risk-reward analysis to determine point of entry, stop loss and exit points that will result in capital gains.
Swing trading and day trading share a lot of similarities. For example, they both involve a strategy and technical analysis, and both are active investing methods. However, there are several differences to consider too. The main difference is the frequency of trades. Let’s explore swing trading vs day trading in the table below.
| Swing trading | Day trading | |
|---|---|---|
| Frequency | Multiple trades per week | Multiple trades per day |
| Costs | Lower | Higher |
| Return period | Longer | Shorter |
| Time commitment | Periodic | Constant attention |
| Trading platform needs | Can use a brokerage account | Need up-to-the-minute trading software |
Keep in mind that many active investors participate in both day trading and swing trading simultaneously. By using both tactics, you may be able to diversify your profits further. However, neither strategy is for beginners.
In general, active trading requires some kind of strategy. Your strategy may evolve over time as you become more skilled, but it’s important to start somewhere. Swing trading usually involves technical analysis to employ your strategy. Below are commonly used swing trading strategies to look into further.
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score, the better the platform—it's that simple.
Swing trading is an active form of investing that yields profits over a short period of time. If you’re ready to try swing trading, be sure to spend time gathering knowledge and developing a strategy. For those who don’t have the means to participate in swing trading, consider long-term investing instead.
Find out why you can’t use the Acorns app in Canada and explore six Acorns alternatives.
Compare six NinjaTrader Canada alternatives to find the best trading platform for you.
New to Questrade? Check out available promotions and offer codes on now.
Track the companies that are adding Bitcoin, ETH or XRP to their balance sheets.
Learn how to choose a free trading platform in Canada to buy and sell stocks.
These are the best renewable energy stocks to buy now in Canada.
Finder’s unique algorithm found the 20 best TSX stocks to buy right now.
Your step-by-step guide to giving stock as a gift and the tax implications you need to know.
Find out how to invest in the S&P 500 in Canada—one of the world’s most popular stock indices—to diversify your portfolio.
Qtrade offers free trades for 100+ ETFs and discounts for active and young investors. But the platform has some drawbacks.