Scalping vs Day Trading vs Swing Trading | Learn What is Best

Apr 4, 2023

Knowing which trading style suits you best is a difficult question to answer, but the choice you make is not permanent. In fact, many novice traders will experiment with some or all of the various styles before settling on a method and strategy that suits their lifestyle and the funds they have to risk.

Scalping
The first trading style of this guide is called "scalping". Scalping is a form of trading where traders aim to achieve profits from relatively small price changes.

Scalpers enter and exit the financial markets within a short time-frame, which is usually a matter of a few seconds, or minutes (but the maximum is a few hours) and are known to use higher levels of leverage.

Day trading
Many traders think that day trading and scalping are similar. Although both trading styles do take place within one trading day, there are important differences that we need to highlight. Day traders open and close substantially less setups compared with scalpers. These traders sometimes open one setup a day, and often not more than a couple per trading day.

Although they both trade intraday, the day trader's strategy is to focus on the best opportunities of the day, and to hold on for a larger profit target. Therefore, a day trader usually holds on to a trade for several hours but not more than one full trading day.

Swing trading
The last trading style of our guide is called swing trading, which is a style in which traders enter and exit sporadically, holding trades over a few days or weeks. Swing trading is a system whereby traders are aiming for intermediate-term trading opportunities, and is significantly different to long-term trading.

Whichever trading style applies to you, it's important to find out, as the trading style you choose will have a profound effect on your trading outcomes and your ultimate profitability.


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