This is a difficult question to answer. The biggest difference between day and swing trading is the length of the day trading. Swing trading offers a great opportunity to invest into stocks that are rising and are also trending upward. However, due to the fact that you can’t see where the stock will be headed in the long term, day trading will make more of an investment and will take longer to gain.
How much should you trade? How much you should trade can vary from person to person based on their own preferences, and how risk aware or cautious you are. The more diversification your investment strategy has the more likely you are to gain profits from short term trading.
What kind of trades is my risk tolerance? In general, traders who are high risk tolerant are more likely to make profits from trading than traders that aren’t. A trader who is short-stopped more than 2% on their portfolio can actually see profits of up to 5% per month!
The most important thing to remember is that the greater the chance of profit you have, the more risky you will be trading. If you are more conservative in trading when you do not have as much profit to make, your stock price will naturally trade higher and you’ll lose more. Also, take a look at the chart below from the NYSE. I’ve highlighted the 10 stocks which have sold the highest.
While you’re looking at the chart, try not to think too much about what you can achieve when you buy a stock on margin! The more you make, the more you can afford to lose if you are short a stock. But if you get involved into margin trading you may find that your profits come out of thin air!
So, how do you trade? How much do you trade? Do you trade short? How much do you profit from short trades? How much time do you invest into margin trading? These are some of the questions you should ask yourself.
I hope this guide helps you make more informed trades, with more profits!
Do you trade short or long on margin?
Are swing trading strategies risky or safe?
Have you considered using margin trading in the long term?
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