Swing Trader versus Day Trader

day trading

Day trading is the big leagues.

Or is it?

Fifteen years ago information did not get to the guy in the street in 140 characters in three seconds.The computers were not placing trades they were for the most part providing data. (unless your business was arbitrage).

The changes are exciting yet at the same time terrifying. There was a time as a day trader that you would measure a trade by how much you earned, today it’s measured in seconds not points.

Fractions to decimals, Select-Net to SOES orders, Super-Dot to Hybrid on the NYSE. The changes came fast and furious.

Making money as a day trader is tougher than ever. Gone are the nostalgic days of cab drivers in NYC trading NASDAQ stocks on the Palm Pilot. The business has changed dramatically.

If that is the case why do people still day trade? The answer of course is the allure of working two hours a day. The feeling of being your own boss and unlimited upside potential.

What Swing Traders can Learn From Day Traders

The best way a swing trader can learn from this environment is to give the two opportunities some context.

They appear to be exactly the same, trading is trading- right? Well I would ask you to consider it from a different angle; “Is there a difference between baseball and softball?”

To the casual observer they are identical. To someone who plays both they are not in the same universe. Baseball and day trading are much faster. Your decisions need to be prepared before you need them.

This is where the swing trader can learn from his day trading cousin. The learning curve to understand how to trade is dramatically reduced with day trading. You can literally enter a new trade every fifteen minutes. Assuming they are good decisions, this gets you closer to your “10,000 hours.”

To understand “how to trade’ you need to trade. The more trades, the more experience.

In order for a day trader to prosper he or she needs to have a laser like focus on the outcomes of each trade and adapt to improve. Swing traders should adopt this same mindset.

Each trade is feedback to improve or validate a strategy. More trades for a day trader is more feedback.

Swing traders can learn from this outcome/feedback loop to become the best they can be.

 

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