lystn

Hey everyone, Kirk here again and welcome back to the daily call. Today, we’re going to talk about the difference between swing trading and day trading. I think the difference between these two is very subtle, but I think people often get it confused, especially if you’re new to trading, whether it’s options trading or stock trading. But here's the reality. Swing trading to me is the ability to trade a security, whether with options or with stock within a range over a shorter period of time. We’ll not necessarily define that shorter period of time because it could be over the course of a couple of days. It could be over the course of a couple of weeks. I’ve often talked to people and I ask them. “Are you a swing trader?” They say, “Yeah. We swing trade the markets monthly or yearly.” Other people might swing trade the markets on a weekly basis, on a multi day basis. But it’s just this idea of trading the market in its random ebbs and flows. I’ve really honestly consider myself to be more than anything probably in this camp of swing trading more so than day trading. I really say we are position traders at Option Alpha which means that we take positions and we will adjust those positions with the ebbs and flows of the market. As the market goes up, we will naturally adjust our positions higher. As the market goes down, we’ll adjust our positions lower. Day trading on the other hand is literally getting into and out of trades on the same day. Although most people think that day trading is a couple of days, the true definition of day trading is getting into and out of the trade on the exact same day. We would buy stock in the morning, sell it in the afternoon or we would buy options in the morning, sell it in the afternoon. I don't think that this is an honest and realistic way to generate consistent income in your account. Can you find success day trading? Sure. Have people found success day trading? Absolutely, but I think that they are the exception, not the rule and I think that day trading is actually insanely hard to keep active, not to mention that it requires frankly every bit of your time during the day which is what we want to try to avoid. I think generally, swing trading is where you should try to focus your attention, position trading. You try to stay away from day trading. That doesn’t mean that you can’t if you want to make day trades here and there. Keep yourself active. It’s just not probably a reliable way to consistently grow your account. As always, hopefully you guys enjoy these daily calls and until next time, happy trading!