Swing trading or Day Trading? Which one is best?

Trading is the act of actively buying and selling an asset in order to make profits from the price movements. But there are many different approaches to the market, of which 4 trading types are the most common. At the end of this article, you will have a good understanding of what each style encompasses and how they differ from each other and can help you determine what type of trades you would like to focus on.

Position trader

Let's start off with the position trader. Trading positions usually refer to large spot holdings, in which an individual, a group of traders, or an institution seeks to accumulate an asset and hold it over a longer period of time. Typically this type of trader approaches the market more like an investor. The position trader cares little for fluctuations on a smaller time frame basis, but instead seeks to balance their inventory, and is looking after slower but more consistent returns over time. The main activity of a position trader revolves around assessing the risk of holding the position on a larger time frame, and therefore puts a heavy focus on aggressive hedging practices.

Swing trader

A swing trader is more active on the mid-term timeframe and looks to enter into positions at significan t price levels attempting to trade pivotal highs and lows in price. A swing trader spends time on analyzing the mid-term fluctuations such as a 4H or Daily timeframe, typically spends time on analyzing charts on a daily basis, and planning ahead of time for the next possible play. Generally, a swing trade takes anywhere between a few days and a few weeks. This is heavily dependent on the sentiment of the market that is present at the time and its volatility. Generally, the swing trader works with zones and relatively large targets. Swing trading is suited for those who do not wish to monitor every movement of the market and do not have time to spend hours on end behind the screen.

Day trader

A day trader is the type of trader that is deeply connected to daily price fluctuations and takes on multiple different positions in a single trading week. A day trader spends the majority of her time, analyzing the charts, watching news, or seeking other relevant information that can help give an edge in the market. Daytrading is much more demanding and time-consuming than that of a swing trader or daytrader. The ideal definition of a daytrader would be: A day trader starts the day without being in a position and ends the day in the same way. A keen eye is needed in order to determine realistic targets for where prices might travel within any given day. This style is suitable for those who aspire to make this their full-time practice, and are able to put in a lot of screentime

Scalp trader

A scalp trader trades in the intra-day time frames and makes multiple trades within the day. Scalp Traders are typically those that trade, analyze, and trade within the heat of the moment, syncing up fully with the heart of the price action as the orders flow in and out of the market generating the price swings up and down throughout the day. Scalp trading is one of the most if not the most difficult style of trading to master. Price on the lowest timeframes can move extremely fast, especially in crypto, and requires an extremely and thoroughly disciplined trading philosophy as well as exceptional chart reading abilities and making split-second decisions. Scalping is not for beginners or the faint-hearted.

Which one is the most profitable?

A logical question one might say, but in the end they can all be very profitable. A swing trader might take less trades, but can make large gains, whereas a day trader can make the same percentages but with more trades and generally look for smaller percentage gains per trade, Generally daytrading has more risk exposure as every new trade requires a trader to take on risk. There are extremely profitable position traders out there, while some scalp traders manage to get the same % yields with trading countless 0,3% moves. Therefore it is quickly becoming clear that there is no “best” or “most profitable” style of trading. Ultimately the style that is most profitable is the style that fits your personality and personal daily life best. Someone else's success with a specific trading style does not mean this will work for you, and vice versa.

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Disclaimer:

The information provided above is not financial advice but for educational and entertainment purposes. Please do your own due diligence or consult a financial advisor before investing in any digital assets.

All opinions expressed on Bitget’s Soapbox (also known as the ‘Soapbox’) are opinions of individual traders using the Bitget platform, and do not reflect the opinions of Bitget or its affiliate companies and partners. The Soapbox author’s opinions are based upon information they confirm to be reliable, but neither Bitget nor its affiliates warrant its complete accuracy, and it should not be relied upon as such.