Day trading and swing trading are two popular short-term trading strategies that rely heavily on price action and technical analysis to capitalize on market movements. However, while day traders seek to capture small but more frequent profits, swing traders spread their trades over days or weeks, allowing their investments more time to grow.
When developing the right trading strategy for your portfolio, this is what you need to know about swing trading and day trading.
What is swing trading?
Swing trading involves holding positions over a short period — typically days to weeks — to capture gains from short-term price swings in the market.(1)Traders aim to benefit from temporary price fluctuations in a security’s price. This contrasts with traditional investment strategies, which typically employ a long-term approach.
Factors to consider for swing trading
Long or short position. Decide whether to take a long position, in which you buy the security in anticipation of a future price increase, or a short position if you expect the price of the stock to decrease in value.
Entry point. The price at which to enter your position in a particular security.
Exit point. The price at which to exit or sell your position.
Profit target. A set price point at which you plan to sell a position for a positive gain.
Stop-loss order. Used to buy or sell shares after the price reaches a preset point, known as the stop price.
Swing trading can involve a variety of assets, including stocks, commodities, indexes and, in some cases, forex pairs. Before engaging in swing trading, you must become familiar with the market and the specific securities you plan to trade, so you can make informed decisions and better anticipate price movements.
This is where technical analysis comes in. It is an investment method that relies heavily on market data, trends and price charts with careful risk management. Together, this helps investors predict the future price movements of a specific security. Contrast this with fundamental analysis, which uses economic, industry and company analysis to determine a company’s true value relative to its current market value.
A combination of these two trading styles can help you make better-informed decisions for your portfolio.
What is day trading?
Day trading, or intraday trading, works even faster than swing trading. Positions last less than a day, with quick trading to capitalize on market fluctuations that can last minutes or even seconds.(2)
Most active day traders use margin to meet pattern day trading requirements, which allows them to leverage their positions for intraday trades. Some also use options or other derivatives to increase exposure, though these strategies carry additional risk.
However, because of this, investors must be ready to assume the greater risk that comes with this type of trading. It is better suited for advanced traders who have the experience and understanding to handle the higher volatility.
Buying long. Buy shares and sell them the same day.
Buying short. Sell borrowed shares and repurchase them the same day.
Swing trading vs. day trading: Key differences
Both swing trading and day trading are forms of short-term, self-directed trading, but they each take a different approach and therefore suit different types of traders.
There is also a difference in the frequency of trades placed. Day traders make more trades, often making several trades each day. They aim to make smaller but more frequent gains — although many day traders ultimately lose money.(3)
When it comes to swing trading and day trading, you can use many of the same strategies. The key difference lies in the time horizon and trade duration. Swing traders typically hold positions for several days to weeks, while day traders open and close positions within the same trading day.
Common strategies include:
Trend trading. Using technical indicators to identify and follow short- to medium-term price movements, capturing part of a larger trend.(4)
Support and resistance. Focusing on price levels where buying or selling pressure typically increases to inform entry and exit points.(5)
Retracement. Applying Fibonacci ratios to identify potential support and resistance areas within a trend for timing trades.(6)
Reversal. Anticipating when an existing trend is likely to change direction, positioning early in the new trend.
Breakout. Trading when prices move beyond key support or resistance levels, often confirmed by strong volume.(7)
Moving average. Using moving averages to smooth price data and highlight trend direction and momentum over time.
Range trading. Identifying defined price ranges and trading within support and resistance boundaries.(8)
News-based trading. Taking advantage of short-term volatility caused by earnings announcements, economic data or market news.
Swing traders often rely more heavily on trend-following and retracement techniques, while day traders focus on momentum, breakout and news-based strategies that exploit intraday price action.
Choosing the best stocks
When picking the best day and swing trading stocks, these are some critical considerations to find the right picks for your portfolio.
Liquidity. This will help you determine how easily you can buy or sell an asset. Look at factors like float size and market capitalization, as well as average daily volume.
Momentum. To analyze trader interest, consider relative volume while keeping an eye out for volume surges.
Volatility. This helps investors determine the likelihood of price movements, using factors like average true range (ATR), implied volatility and historical volatility, to anticipate the day’s likely trading range.
Technical strength. This analyzes recent price fluctuations, in addition to moving averages, RSI and MACDs to determine alignment with market trends, while watching for breakouts.
*Source: Volume data from Nasdaq, as of October 9, 2025.
While both day trading and swing trading stocks can be similar, day traders will want to pay particular attention to stocks with high intraday volatility and volume. Stocks like Nvidia (NVDA) and Tesla (TSLA) are favorites for this reason.
Best brokers for swing trading and day trading
Choosing the right broker is just as important as picking the right stocks or strategies. The best broker depends on your trading style, platform preferences and required tools. Here’s a breakdown for swing trading and day trading.
Swing trading brokers
Swing traders hold positions for several days to weeks, so they need brokers offering strong research, charting tools and reasonable fees for occasional trades.
Key swing trading features to look for
Low commissions and fees. Swing traders trade less frequently, but high costs can still eat into returns.
Advanced charting and research tools. RSI, MACD, moving averages and trend analysis for multi-day patterns.
Stock screening and alerts. Find trending stocks and set alerts for breakout levels.
Educational resources and reports. Research-driven tools to support longer holding decisions.
Mobile and desktop flexibility. Ability to manage trades on the go without needing constant monitoring.
Day trading brokers
Day trading requires speed, precision and access to intraday data. Brokers for day trading should specifically excel in execution speed.
Key day trading features to look for
Ultra-low commissions and fees. High trade frequency makes cost efficiency crucial.
Lightning-fast execution and low latency. Even small delays can impact profits.
Intraday charting with Level 2 quotes. Track bid/ask depth, order flow and short-term momentum.
Stock scanners and news feeds. Identify pre-market movers and intraday opportunities quickly.
Customizable hotkeys and automation. Enter/exit trades instantly to capture fast price moves.
Margin access and leverage. Useful for maximizing intraday setups — though it increases risk.
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Profitability comparison
Day traders and swing traders have two distinct but different goals. Day traders aim to make smaller but more frequent trades, while swing traders make larger but less frequent trades. However, keep in mind that frequent trading also increases transaction costs and risk exposure.
Meanwhile, swing traders do not make as many trades because they can hold positions for several days or weeks. By allowing their trades to develop over time, they may capture larger price moves and potentially achieve higher returns per trade. However, they also face the added risk of overnight market changes that can affect open positions.
Swing trading pros and cons
Pros of swing trading
Less capital required. Swing traders usually need less starting capital than day traders, making it more accessible.
Fewer fees. Because swing trading requires fewer trades, you also pay fewer fees.
More time for preparation. Traders have more time to research, analyze charts and plan trades.
Smaller time commitment. Trades span days or weeks, allowing for part-time trading rather than full-time monitoring.
Better for beginners. Swing trading’s slower pace makes it easier for new traders to learn the markets without the pressure of rapid decisions, though risk management is still essential.
Cons of swing trading
Still carries risk. Swing trading gives the markets more time to react, but that does not mean those fluctuations are always favorable, so traders still risk major losses.
Greater risk for emotional investing. Because traders have more time to consider their trades, they also have a greater opportunity to second-guess their investment decisions and stray from their strategies.
Requires some know-how. To develop the right trading strategies, traders must possess a solid understanding of markets and investing as a whole, enabling them to analyze charts, identify trends and track economic events.
Day trading pros and cons
Pros of day trading
Opportunity for more frequent profits. Day trades may not net as much as swing trades, but they can still experience more frequent gains, given the volume of transactions.
No overnight risk. With intraday trading, you avoid the risk of losses that can come with overnight and long-term trading.
Faster compounding for profits. Day trading allows interestto compound more quickly on any profits you earn.
Cons of day trading
Ties up liquidity. Day trading requires accessible capital that you can use to make multiple trades a day, with a $25,000 minimum equity requirement for pattern day traders.(9)
Risk of emotional investing. Day trading requires instant decisions, which can lead some traders to act impulsively. It is critical that traders counter temptation with resolve, or they can fall victim to the perils of emotional investing.
Enormous time commitment. Day trading requires traders to be tuned into the markets throughout the day so they can make quick decisions based on market fluctuations.
Higher expenses. Because day traders make more frequent trades than swing traders, they may accumulate more fees.
Pros and cons snapsnot
Swing trading
Day trading
Pros
Better for beginners Less capital required Smaller time commitment Greater preparation Fewer fees
Opportunity for more frequent profits No overnight risk Faster compounding for profits
Cons
Still carries risk Greater risk for emotional investing Requires some know-how
Ties up liquidity Risk of emotional investing Enormous time commitment Higher expenses
Bottom line
Ultimately, the decision of swing trading versus day trading depends on several personal factors, including your risk tolerance, time horizon and capital requirements and comfort with short-term market fluctuations. Before starting, identify stocks or assets that align with your chosen strategy, and always consider the associated risks.
Frequently asked questions
Swing trading can offer larger gains per trade because positions are held over days or weeks, but profitability depends on strategy, skill and market conditions. Day trading can also be profitable, though it typically involves more trades with smaller gains and higher transaction costs.
Many traders use the 2% rule to limit their risk on any single trade to just 2% of their overall capital. It helps reduce the likelihood of major losses while protecting the rest of your capital.
Lena Borrelli is an experienced finance writer with a deep understanding of personal finance, investing and consumer banking. Her work has been featured in top-tier publications such as Forbes, TIME, Bankrate, Moneywise and Annuity.org, where she provides expert insights on financial trends, smart money management and emerging fintech solutions. With a background in personal finance and content strategy, Lena specializes in breaking down complex financial topics into clear, actionable advice for readers. When she is not writing or scanning the news for the latest headlines, she is happiest spending time in the Florida sunshine with her husband and two pups.
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