Day Trader Vs Swing Trader – Whats the Difference ?

[tps_title]Trade frequency [/tps_title]


Trade frequency is simply how many positions you’re gonna be taking daily every month and as again the name would imply a day trader is going to have more trades than a swing trader on a daily basis and also every month so for day traders they can make anywhere from 5 to even hundred trades per day. day traders the main difference between the two is that day traders they’re able to take this many positions because they’re generally looking for smaller moves.

they’re looking for smaller price fluctuations to capitalize on and as a result their risk-reward file also tends to be a little bit tight what that means is a risk-reward profile of saying one point five to one or even one to one is quite common for day trading strategies and what that means is for every dollar that you’re risking you’re looking to make a dollar fifty

you know two dollars in the case where it’s one to the one you’re looking to make one dollar while you’re risking one dollar so day trading strategies tend to be a little bit of a higher strike rate meaning you’re going to write more times than not and as a result of a higher strike rate you’ll likely have a lower risk-reward profile and being able to catch multiple small price fluctuations daily is what this strategy is all about so 5 to 100

you won’t necessarily be going towards this side you’ll be leaning more towards the lower end of that side as a day trader alright where is a swing trader because they’re looking for larger moves and because their holding period tends to be longer they’re going to have fewer trades every month. 

a swing trader when trading their strategy and filtering out the non-quality setups will have anywhere from five to ten trades every month and again this kind of drives back towards the risk-reward profile of these because they have fewer trades every month and they’re looking for larger moves than day traders are swing trading risk-reward profiles tend to favor higher

risk reward which also means a lower strike rate so while swing trading strategies tend to have a lower strike rate meaning you’re going to win less than you’re going to be rather you’re going to be losing more often than you’re going to be winning which is okay because the risk-reward profile tends to be most commonly three to one which means that a swing trader will often

risk a dollar to make three dollar gain alright so you guys can see whereas day traders they’re looking to capture smaller moves they’re looking to get a higher strike rate and they’re looking to use a lower risk-reward profile whereas a swing trader they’re going to be looking to take fewer trades for bigger moves so the risk-reward profile is going to be greater and that means that their strike rate is often gonna be lower than that of a day trader all right.

Scroll to Top