Day, Swing, or Position Trading?

Day trading as a profession includes three distinct styles of trading known as day, swing, and position trading. Day trading as a style is short term trading where a trade might last anywhere from a few seconds to a few hours, with most trades lasting several minutes. Swing trading is medium term trading where trade usually last a few days, but can easily last up to several weeks. Position trading is long term trading (what used to be called investing), where trades usually last many months if not several years.

Day trading is considered the most glamorous of the three trading styles, and new traders flock to day trading because of its potential to make a lot of money in a short amount of time. However, day trading also requires the most amount of effort (in learning and trading time), and can also lose the most amount of money in a short amount of time. Swing trading and position trading are considered slower and less profitable, and are often neglected by new traders. However, some of the most successful and most profitable professional traders are swing and position traders.

Swing and position trading are also very flexible with regard to trading full time or part time. Swing and position trading systems usually use daily, weekly, or even monthly charts, and can therefore often be traded in a little as a few minutes each day. I often receive questions from new traders who want to know how they can trade while they temporarily keep their current job. The answer is by being a swing and position trader, or at least focusing the majority of their trading on swing and position trades.

If you have read this far, but are still sceptical about swing and position trading, because you believe that day trading is where the money is, consider the following. I know of swing and position trading systems that regularly take trades that make over €10,000 ($15,000, or £8,000) trading just one contract, but I do not know of any day trading system that even comes close to this level of profit from a single trade. Just something to think about the next time you hear somebody scoffing at swing and position trading.