Opening range breakout strategy
Opening range breakout strategy
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Active traders often fall into two camps: swing traders. Both seek to profit from short-term stock movements (versus long-term investments), but which trading strategy is better? Here are the pros and cons of day trading versus swing trading.
Key Findings
Day trading involves the use of technical analysis and charting systems to make many trades in one day.
Swing trading makes trades based on fluctuations in the prices of stocks, commodities and currencies that occur over the course of days or weeks.
Traders should choose a strategy that complements their skills, preferences and lifestyle.
day trading
Day trading, as the name suggests, involves making dozens of trades in a single day based on technical analysis and sophisticated charting systems. The goal of a day trader is to make a living trading stocks, commodities or currencies, making small profits on numerous trades and limiting losses on losing trades. Day traders usually do not hold any positions and do not own securities the next day.
The biggest attraction of day trading is the opportunity for impressive profits. But this is only possible for that rare person who has all the necessary qualities needed to become a successful day trader, such as determination, discipline and diligence.
Short review
Day trading involves a very unique set of skills that can be difficult to master. Investopedia's Become a Day Trader course provides a detailed overview of day trading with over five hours of on-demand video. During the course, you will learn everything from order types to technical analysis techniques to maximize risk-adjusted returns.
swing trading
Swing trading is based on identifying fluctuations in the prices of stocks, commodities and currencies that occur over several days. A swing trade can take anywhere from a few days to a few weeks. Unlike a day trader, a swing trader is unlikely to make trading a full-time career, although a trader may choose to be a day trader or a swing trader.
Anyone with the knowledge and investment capital can try swing trading. Because of the longer time frames (days to weeks rather than minutes to hours), swing traders don't have to stare at their computer screen all day. They can even maintain a separate full-time job (as long as they don't check trading screens all the time at work).
