Published On : 05/30/2023

How to Choose a Trading Style: Day Trading vs Swing Trading vs Scalping

There are various types of trading that you can choose from to successfully make a profit. While some of them are easy, others might be a little more complicated. It all boils down to understanding what trading style suits your needs perfectly. While there are various trading styles, let’s take a look at three of the most popular ones.

Short-Term Trading

Short-term trading, as the name suggests, is trading that takes place over a couple of hours or days. This trading is usually performed with stocks, silver, gold or Forex. Short-term trading often sees minor fluctuations, but the key is keeping an eye on real time pricing to make the most profit.

Long-Term Trading

Long-term trading is trading that occurs over weeks, months or sometimes even years. This is a more passive trading form as opposed to short-term trading and you don’t have to keep a close eye on the market all the time. Long-term trading is better for long-term investment, but it’s also a little riskier if you don’t understand the market well.

Types of Trading

What Is Scalping?

Scalping is a form of short-term trading. While you can make small profits using this trading style, it’s at a high frequency and in this style of trading, even seconds play a huge role. If you plan on using scalping as a trading style, you will have to spend a lot of time in the market.

What Is Day Trading?

Day trading is pretty self-explanatory. It refers to trading you can do during the day. All your trading done during the day, whether it’s a few hours from when the market opens or towards the end of the day, is still counted as a day’s trade. While quicker short trades are good for people with experience, day trading on longer timeframes is better suited for beginners.

What Is Swing Trading?

Swing trading is a medium-term trading option that involves buying and selling assets over the course of a few days or weeks. While this is not as quick as day trading or scalping, it’s not as long as long-term trading. There are various reasons why swing trading is better if you hold a full-time job. For starters, you don’t need to sit and observe the market and you have time to do other things as well. While you do need to be cautious, you can check the market a couple of times and take a call on when is the best time to buy or sell.

Scalping vs Day Trading – The 3 Key Differences

Coming back to short-term trading, the two main options are scalping and day trading. If you’re unsure about choosing between the two, here are a few things to know. Scalping needs you to be very attentive. You need to observe the market as soon as it opens. While day trading takes longer, sometimes it can end in a couple of days, giving you more time to do other things. 

Scalping involves trading of multiple small profits that you can accumulate during the day. Day trading is all about fewer traders with larger profits. Both of these may be active management styles of trade, but day trading is less intense. This means that if you have a job that needs you in front of a computer for long hours, you can opt for day trading as a side hustle.

Are There Any Successful Scalping Strategies?

If you plan on trading using scalping, you need to understand that the risk-reward ratio is low. This means you can do multiple trades using smaller amounts, instead of blocking one large sum in one trade. 

What Is Better – Day Trading or Scalping?

Day trading and scalping are both relatively short-term trading strategies, but they have different styles. If you love the excitement and love staying hooked to the market for hours, you will love scalping. But if you’re a multitasker and you don’t enjoy staring at the market all day, you may want to consider day trading as a laid back trading approach.

Is Scalping Better Than Swing Trading?

Scalping and swing trading are very different from each other. While scalping involves multiple trades in a couple of hours, swing traders do not get so many opportunities to capitalize because they often block their money for a few days or a couple of weeks.

What Trading Style Will You Choose?

All trading styles come with risks and rewards. So it all depends on your understanding of the market, the amount of time you can dedicate to trading, and your skill. If you’re a beginner, you might want to hold off on scalping because it involves making quick decisions. Once you learn the market, the ocean of trading is for you to explore.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.