Forex

Scalping vs Swing Trading

Scalping vs Swing Trading

Scalping vs Swing trading. A lot of traders- especially beginners – wonder which trading style will be more suitable and profitable for them. Should we choose just one of them, or use them in a combination depending on the market conditions. Which type of trading is more preferred amongst you?

Scalping and swing trading both are short-term trading methods that are practiced to pocket profit from price movement. Once you get clear ideas on each, you can choose a trading strategy that best suits your temperament. In this article, we will discuss scalping vs. swing trading and the pros and cons of each.

Scalping vs Swing Trading

Both scalping and swing trading are short-term trading techniques employed by traders. Scalping involves multiple transactions of short duration; each can last between a few seconds and a few minutes to gain from price movement. It may limit your profit but also helps by reducing your risks from long-term exposure.

Swing trader’s eye on long-term profit. Instead of making several small transactions, they hold onto their position for one day or a few days till the market reaches their desired profit level. It is midway between day trading and long-term investment.

Time Frame

A scalper intends to gain a smaller profit from the short-term volatility of the market. In scalping, a trader uses a Tick chart or 1-5 minute charts.

Time Frame

On the other hand, the swing trader uses Daily or weekly charts. Swing traders hold their trade, and they do not care about the short-term movement.

Duration of Trade

Scalping the market means working on a ‘quick in, quick out’ approach. Scalper’s always looked for fast-moving opportunities. If the market allows, they can earn 100 pips within a minute.

In swing trading, traders wait for days or weeks to hit the profit target. In a nonvolatile trend, their take profit may hit soon. On the other hand, they should wait for the market to reach their goal on a volatile structure.

Risk Level

Scalping vs Swing Trading

In comparison to the scalping vs swing trading, the scalping can give quick profit. Although it is very risky.

On the other hand, swing traders must have knowledge about suitable technical and fundamental analysis. Swing trading allows earning profit with less stress and it is perfect for beginners.

Strategy Level

There are lots of scalping strategies available worldwide. In all of them, scalpers make a profit from the changes in an asset’s bid-ask spread. Scalper does not need to know the technical & fundamental analysis or geopolitical uncertainties.

There are lots of swing trading strategies available in the market with indicator based, candlestick based, etc.

Number of Trades

The number of trades taken by the scalpers can be hundreds during a day. On the other hand, swing traders take a few only. 

Swing trading vs. Scalping – Each trading system comes with its own set of risks and rewards. Selecting the best fit strategy revolves around your personality and how much time you’re willing to spend trading. 

ENHANCE YOUR FOREX TRADING

  1. If you’re new to forex trading, download our Forex for Beginners Trading guide.
  2. Learn to do your own TRADING ANALYSIS in a short period of time. Check out The Complete Guide To Forex Trading. 
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