Swing Trading Vs Intraday

There is a common sentiment among traders as they say, swing trading can help you in overcoming the failures that usually arise when you are engaging in intraday trading.

In both cases, your stock market business objectives can be achieved. But considering swing trade to be a better option over intraday is completely an individual’s mindset.

Let me illustrate the key features of swing trading that will make you opt for, otherwise.

Swing trading and intraday trading operate in varied time bound frames, in intraday trading you will buy and sell stocks in a day, while in swing trade you have an option to buy and wait for a short term gain from few days to few weeks.

You can invest in swing trades when you have adequate time to wait for return on your investment, from a few days to a few weeks.

When you participate in swing trading at NSE/BSE you can make short term gains with minimal loss on your stock investments. That means, your stop loss execution of 10% and stock purchase up to 3 percent of your trading account capital can protect your bought stocks when the share prices tumble fiercely.

You can react to swing trades effortlessly and spare yourself from being a victim of losses by utilizing the technical indicators. It will enable you to avoid speculation and you can make an informed decision.

You can reap your desired goals sets in swing trading through planned layout that too it is less time consuming when compared to intraday trading practices. In a way, you can look in as a part time job that consciously causes less impact on your day to day activities. You will keep larger time frames when trading on swings.

You can relax and stay cool when trading swings because you will have adequate time to select your stocks thus keeping you calm without emotional breakdowns.

However, swing trades help you make short term good returns with negligible losses but it is intended to make high profits in the long run.

Note: High priced stocks need high trading account capital :

Swing trading attracts a high volume of trading capital on high priced stocks. When you buy/sell stocks you will encounter risk and to avoid it, you will have to apply stop loss brakes, reasonable strike price.

But, due to the market volatility and liquidity factor of the stocks, it may lead to a slippage that results in less gains than the expected returns. Hence, I would advise you to limit your stock investment that is less than 3 % of the trading account capital.

For instance,

If your stock’s slippage falls by 10 percent on a stock of 500/- then, the slippage amount will be 50/-. At that instance, for a slippage of 50/-, you must hold trading account capital of at least 5000/- as it comes to 1%.

Therefore for highly priced stocks, your trading account capital must also be high.