New traders are always asking me what types of trading—day or swing—they should focus on to make the highest returns.
It’s a complicated question and there’s no perfect answer. There are pros and cons to each, and every trader has his or her preference.
Let’s break down each of these types of trading…
Day trading is an easy one because it’s exactly what it sounds like—it’s when you open and close a trade within the same trading day. If you’re going to day trade, it means being glued to your screen all day.
And I do mean ALL DAY. Day trading involves very short-term trades, which means day traders need to keep an eye on price fluctuations throughout the day and react quickly when the setup is favorable.
But, the biggest benefit of day trading is that you can shut your brain down completely at the end of the day. You don’t have any open trades, which means you don’t have to worry about the numerous market risks that can occur during off-hours.
Many folks love day trading. They’re addicted to the rush of watching every movement in the position. They prefer it to any other activity or hobby. And they have the accuity and commitment to execute hundreds of small trades every day.
But many folks don’t have that level of stamina. Or they don’t have the desire (or ability) to keep a close eye on an open trade all day.
In that case, swing trading might be a better fit.
Swing trading involves holding a position for a longer (although still short) period of time—typically anywhere between two and seven days.
Swing traders don’t need to keep constant vigil over their positions, which is the biggest pro. They can set their stop and limit orders, and walk away.
This is the type of trading I prefer to engage in, and the type I think you should too.
I specifically focus on swing trading when entering positions in my 16 Hour Jump Trades program, where we look for the most explosive opportunities inside the currency market.
If you’re trading currently, I’m sure you already have a strategy or certain tools you use to pick your trades, but before you place another trade, make sure you are diversified.
Because the downside of swing trading is having to hold your positions overnight. As I mentioned, a lot can happen between the market close and the next day’s open, and holding positions overnight increases your risk level.
So if all your positions are in a certain sector (or heck, even just one certain market) and the market drops, so do your investments.
That’s why I stress to invest in multiple markets to limit your risk and highly increase your profit potential.
Many traders don’t even know about the currency ETF market, where we’ve made a return of 3,752% in just the last 7 years.
You need to be in this market and here’s why:
It has zero correlation to the stock market, and it’s produced incredible results for us (like 223.08% on GLD just a few weeks ago). I shouldn’t be telling you this because it’s for paid members only, but I’m going to anyways because it’s so great…
We are in FXE right now as you read this. We purchased the options on Monday, and within just 4 days, the options are already up 60.80%. That’s insane!!
With $1,000, you’d be up $600! Or with $5,000, you’d be up $3,000!
So diversify yourself. It’ll be worth it when the one single market you’re invested in drops and you lose the majority of your money. It’s like the saying always goes.. “don’t put all your eggs in one basket”.
Watch the briefing now (for FREE) where I tell you exactly how we identify these currency ETFs poised to explode and how you can spot them too.
But to wrap it up, there’s no right answer to which kind of trading is best. It all depends on the trader, their risk tolerance, and how much time they want to spend in front of a screen each day. But, I prefer swing trading.. Especially if you’re using a strategy like 16 Hour Jump Trades.
On another note, most traders tend to base their trades on whether they believe an asset will go up or down. I get it.
It makes sense—after all, profits (or losses) are determined by the asset’s price movement. Ideally in the direction of the trade, since that’s the whole point.
But there’s another way to bet on an asset’s price movement—without taking on a stance on which direction it’ll go. It’s called long straddle options trading. This is a great strategy if you think an asset is going to be particularly volatile, and here’s how you execute it…