In our daily forex trading lives, many strategies are becoming popular day by day. Position trading and swing trading are these strategies which are being used by traders all over the world. Though these strategies have significant different in their trading method and time frame, many traders think these two strategies are the same. These two are not the same and they have much different. We are going to tell you the difference between these two strategies and hopefully, you can distinguish a day trader from a swing trader in your next market trades.
What is the difference between them?
Every single trading strategy is different in the forex market. Even if you look at the professional Aussie traders then you will notice that same trading strategy is used in a different way by the different experts in the financial market. To be precise you trading system tends to vary from person to person. We are going to focus on the main differences that these two traders have.
The time frame is not same: The first major difference between a day trader and a swing trader is their time. The timeframe that these two types of trader use in the market are very different. Swing trader uses a long-time frame in the market and the day traders use a short time frame of like 1 hour or 2 hours. As they have to close their trades on the day of the opening, they do not open their trades for many times in the market. They use short timeframe to make a profit or close their trades with the loss. However, no matter which trading strategy you use make sure that you trade the reliable singles in your trading platform with proper risk management factors.
Getting result varies with strategy: The result of these traders also varies with strategy. The day trader gets to know their results within the day. They do not have to wait for many days. On the other hand, the swing traders have to wait for the market trend to go in their favor before closing the trade. Swing trader can get the result of their traders after many days. It can also be weeks.
The risk of market volatility: It is the day traders who face the most market volatility. As they are trading in a short timeframe and closes their trades in a day, they have to take the risk of market volatility in Forex. The swing traders are safe. They can wait for many days and also weeks before the market trend is swinging with their trades in favor. They face the least market volatility between these two types of traders.
Every single trading strategy can help you to make a profit in the forex market. But in order to make consistent profit in the financial market, you need to focus on high-quality trade execution with proper risk management factors. If you are relatively new in trading then try to use the price action confirmation signal to reduce the risk exposure in the market. If you consider trading as your full-time profession then make sure that you are trading with the reputed broker like Saxo since they provided an excellent trading environment to their retail clients. Try to develop a reading heading as it will help you to remain up-to-date with the latest market news. And always trade the market in favor of the long-term trend.
Conclusion: Forex market is always changing. Day trading and swing trading is becoming a popular strategy due to its extreme level of profit potential. Though they are popular among traders, they are not the same. As a full-time trader, you should use this system based on your own personality and always focus on quality trade execution in the market.