Successful traders have said over and over again that the surest way to success is to trade a time frame that fits your personality best. There are three major time frames that can be summarized as day trading, swing trading and position trading. In order to help you decide which is best for you we will now take a look at an overview of each.
Intraday trading or day trading is also known as scalping and traders places several trades a day which last for very quick periods of time lasting often minutes and sometimes up until hours. Day trades are generally small in size and are very frequent with many trades taken each day.
There are many advantages of day trading which include very little risk is taken upon by traders as they tend to trade small size with tight stop losses and take profit levels. Intraday trading requires intense focus as traders watch each market tick and manage their positions.
The cons of intraday trading are you can loss money very quickly and you also will pay a lot of money in commissions. A small mistake can turn into a huge loss in a very short amount of time.
Swing trades can last from anywhere from one day to several days or even weeks. Typically swing traders try to catch price retraces or trend reversals using indicators or price action to help tell the tale of the tape. Using swing highs and lows from recent price action traders use these points of reference for placing their entries and exits.
The pros of swing trading include it tends to be easier to manage trades than day trading as well as more traders are profitable as swing traders. The spread has less of an impact than it does on intraday trading therefore currency traders do not waste money on broker commissions.
