Swing trading terms 101

Written by
Bence András R.
Fact checked by
Adam N.
Updated
Apr 2024
Swing trading terms 101

Day Trading, Swing Trading, Entry points, and more... maybe it was overwhelming first. But no worries, we've got you covered. Let's start fresh. 

Matt Johnes from TradeSanta is here to help you clear up some definitions when it comes to trading strategies. Here below you can read more about the differences of Day Trading, Scalping, Swing Trading and more. 

Definitions of different trading styles

Day Trading

"Day trading is a short-term trading strategy that consists of opening a few positions at the beginning of the day and closing them at the end. Day traders sometimes open one or not more than a couple of trades per day. Their goal is to find the most profitable buying and selling spot. Day traders need to always stick to the plan and be patient as the price moves up and down, with and against the position multiple times per day."

Scalping

"Scalping is a very short-term trading strategy. The target of scalping is to take profits out of the smallest price movements. [...] The main advantage of scalping strategy is the ability of gaining profit from small price changes within the shortest time frame possible. Scalping strategy is based on buying and selling almost instantly, the positions are closed even within a few seconds. Traders (known as scalpers) need to always be precise with their timing and with their limits of Take-Profit. They must also have a high overall percentage of trades with profit to be successful. Scalping is an exciting, but a very risky trading strategy. Traders need to keep costs in mind and don’t get emotional to be a successful scalper."

Swing Trading

"Swing traders are trying to trade the swing of a chart, hoping to catch a big move. They use technical and fundamental analysis to determine whether a cryptocurrency will experience a significant price change. They tend to stay up to date with new developments that may affect the price action of their picks. Traders use chart patterns to obtain the information about the coin and when to enter or exit a position. Swing trading is suitable for patient traders as it will be necessary to wait for the right trading opportunity, such as a price movement sufficient enough to generate a reasonable profit."

Position Trading

"Position trading, which is considered to be a buy-and-hold strategy, is the longest time-frame trading strategy of all. Open positions are held for several days to several weeks, or even through an entire year, depending on the market trend. Position traders are more interested in long-term investment than in short-term price changes. They are using longer-term charts and a combination of fundamental analysis to determine the direction of the market. Position Traders don’t need to be at the computer when their trade enters or exits, they often use pending orders to enter the market. This trading strategy is only suitable for the most patient traders, who don’t easily get excited by short-term price fluctuations on the market. As a position trader, first you will need to do some research, but once a trade is placed, it doesn’t require a lot of time to monitor or manage."

What else do you need to know about swing trades?

Want to know more about swing trades before deciding where to head next in your trading journey? We are going to release some more content about swing trading with topic like:

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Bence András Rózsa
Author of this article
Bence is a former broker analyst for BrokerChooser. Having an MSc in international economy and finance, he focused on equities, cryptos and newcomer financial services. He also gained years of experience within the brokerage industry, specializing in stock and CFD/forex brokers, crypto providers and robo-advisors.
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