[00:08] talk to you about the differences, the pros and cons, between swing trading and day trading. Many of you constantly ask me: What's better? Where can you make more money? What's more convenient? What offers a better quality of
[00:21] life? If I were to start trading again, where would I do it? I understand that many of you, when you try to learn trading, don't know exactly which path to take: whether to go towards higher timeframes and trade on a 4-hour,
[00:34] daily, or weekly basis, or to go towards lower timeframes, like a minute or 5 minutes, where you try to get more trades and do day trading. I know that doubt, I know that moment, because I've been there too. I've already been through it,
[00:49] prefer swing trading to day trading, and that's what I do. I want to explain, from as objectively as possible, what pros and cons I see in each, so that
[01:02] you have this fresh information and can keep it at hand. intelligently. So in today's video we're going to look at the pros and cons of swing trading, and in the next video, which will be released in a few days, we'll look at the
[01:15] pros and cons of day trading. Look, one of the most important things a trader should try to achieve is to develop strategies, systems, or entry patterns/setups that are durable, that have a
[01:30] very long lifespan, because in general, strategies—although because you've probably been in the industry for a short time—expire. seeing in the markets today aren't infinite; they do n't last forever. Some disappear
[01:46] completely, others are seasonal. That is, they occur seasonally, depending on the time of year. These patterns may or may not appear, and others come and go in a somewhat arbitrary way. It's difficult to
[02:00] predict, but it's very difficult to find a pattern, methodology, or strategy that will hold true throughout your entire trading career. The most common thing is that you'll have to adapt the market and the strategy to you. That's
[02:12] advantage, a very big pro.  This is The patterns we identify in higher timeframes, from h4 upwards, are much more robust than those in lower timeframes like h1, 5
[02:27] minutes, 1 minute, or even less. We all know that the information we see tool you use when trading, is simply graphical information that reflects the behavior of the mass of
[02:40] both individuals and institutions. The within a data package—in this case, a candlestick—the more reliable that group of people, money, or institutions will be in making a sound decision
[02:56] over time. It's like walking down the street: if you see a large group of people doing something daily, it's much more likely that what happens daily will happen the next day than if you see
[03:11] if you see 50 out of 100 doing it, it's much more likely that the pattern will repeat itself the next day. And while it's not absolute certainty, it doing it in lower timeframes where the information is more limited.  It's much more
[03:24] higher timeframes are more frequent, it's easier to generate representative strategies. This means having patterns within the strategy that are truly reliable and faithful to what's happening in the market,
[03:38] that accurately identify what the market is doing. It's easier to predict the higher timeframe than a lower one. So that's a point in favor of swing trading. The trading is that you can diversify across many assets simultaneously and across many
[03:54] types of strategies. This way, you don't depend solely on what one asset will do. Imagine you only trade one asset, one market. This, which is quite typical of day traders and seems
[04:06] positive, doesn't necessarily have to be. But what seems positive on its own has some risks. If that specific asset changes for whatever reason, and you're suddenly unable to adapt to its new conditions, whether volatility
[04:20] time trying to adapt to that asset again. Because if that asset doesn't do what...  You expect your strategy to lose, and therefore you won't get the return you expect. However, as a swing trader, you
[04:33] diversify your trading across many assets, making you independent of the representativeness of your trading sample. Therefore, if you're a winner and see that your setup and strategy work across
[04:46] many assets, it's more likely that this will be robust, something that happens independently of what the market does, making it probable that in continue to work. The third advantage is the most obvious and the one that
[05:00] personally caught my attention the most when it comes to swing trading. The dedication required for swing trading is much less than that of a day trader at all levels: in terms of strategy
[05:12] development, execution, and mindset. course, and I'm speaking generally, who trade only a few hours a kind of balance between day trading and living life, but
[05:25] generally, the day traders I know who are more successful spend many hours in front of...  The screen, whether trading, after trading, or before swing trader, on the other hand, has a much more concentrated trading schedule focused on a
[05:38] particular time period. For example, I do it every four hours. Every four hours I check the market and trade for a very short time within those four hours, every four-hour candle. There are other traders who even do it daily. I have
[05:51] daily and even weekly strategies. This makes it much more feasible quality of life, between having a traditional, classic, typical, and good life, and trading.
[06:03] of view, the obsessions with this industry, with trading, with constantly being decrease a lot when you are a swing trader. Because it allows you, in a way, to from trying to get results from trading, because you do nothing else; you are
[06:17] fully focused on day trading. In contrast, in swing trading, it is possible to maintain your daily life as it was. You do your job, you do your hobbies, you have your social relationships, and you add trading as one more
[06:30] pillar within your life.  vital aspects of your daily life, making there much less pressure and allowing you the luxury, so to speak, of learning more calmly how to beat the markets. The fourth strength
[06:42] of swing trading for me is the psychological aspect. Psychologically, emotions, from what I've observed after many years, both in my own case much less intense in swing trading. The emotional impact you'll
[06:55] suffer on your decisions is much less because exposure to screens is greatly reduced, and when you're exposed to screens less, it's easier not to get too emotionally involved with what you
[07:07] 're doing. Imagine a day of trading, do everything right, and the market, for whatever reason, has dealt you a severe blow. It's very when you do everything you're supposed to do right and for several days you've hit
[07:22] a daily stop loss. The time you dedicate to day trading in front of screens is so high that you expect to receive something in return. We human beings.  Something and receiving a reward in trading—that may not
[07:35] happen, so a swing trader's emotions are much more protected because they are able to maintain other areas of their life much healthier. Furthermore, the FOMO, anxiety, anger, resentment, revenge—those kinds of emotions and
[07:48] traders suffer from because they are so focused on what the market is doing— disappear, or at least are greatly reduced. This doesn't mean we will see later in the cons, but they are different. The next pro that comes to mind
[08:02] the need to make discretionary decisions in the markets is drastically reduced. There's little improvisation as a swing trader. As a day trader, the need to make real-time decisions, the reaction time, not making
[08:15] all of that is information you have to deal with in real time and very quickly. As a swing trader, this does n't happen, so stress is greatly reduced. It's much easier to make decisions from a
[08:27] longer-term perspective, at times when you don't have the need to act.  Not only quickly, but you can also until you're certain you're making
[08:39] the right decision. This significantly most appeal to you: most of the traders I know who make money— the traders I see who actually make
[08:53] money, whether a lot or a little, but they make money in the markets—are swing traders. In other words, it's much easier, from my perspective, to profit from trading as a swing trader than as a day trader. It's also true, as
[09:05] the profits you can obtain as a swing trader are likely lower than those you can obtain as a day trader, but the probability of achieving profitability as a swing trader is much higher than if you do it as a day trader. And
[09:18] much easier to execute a winning plan as a swing trader for many reasons, including psychological, temporal, and management factors. So, wants to start trading, they are much more likely to succeed
[09:32] as a swing trader.  As a day trader, you do n't risk anything in your daily life, as I mentioned before. You can maintain this activity alongside your other chances of failure. The next strength that comes to mind
[09:45] On most platforms where you can manage third-party capital—that is, capital from investors who invest in you—it's much swing trading strategies. This is because it's easier to place that amount of
[09:59] scalper or day trader. The investment algorithm has to make decisions for you when someone copies your strategy and invests in you. It's replicate what you're doing when you're a trader, and your decisions are more
[10:13] deliberate than if you're a scalper or day trader who constantly enters and exits the market. For scalpers, the divergence between what you do and what investors do when they copy you is much wider. In
[10:26] contrast, as a swing trader, it's simpler because the stop-loss orders are typically wider, giving the algorithm or platforms much more time to adjust. They replicate your strategy, and therefore the capacity to receive investment is much greater, since in the
[10:38] if you win but the investor doesn't win with you, it's useless to have a capital. So it's something you should think about. I'll go through the last three advantages obvious. You pay lower execution fees by making fewer
[10:53] trades. This means that in the end, when you've made 100, 200, or 300 trades over the course the fees you've paid are much lower than those paid by a day trader who trades 100, 200, or 300 trades a month. This means that a swing
[11:06] trader strategy that has broken even or been slightly profitable over the course of a year can end up breaking even or even winning, and not in the red, as happens may not have made any profit that year, but
[11:19] paid, have ended up losing a lot of money. So those reduced fees, due to...  Being a swing trader is a point in favor of this type of activity. And trading team to work with as a swing trader, since the
[11:34] much easier to coordinate among everyone. Personally, I have a group of people I work with, and we share trading information other is doing and we have enough time to validate whether what
[11:48] we're doing, or what others are doing, is correct. This helps a lot in building self- you know your decision is validated by others. When you trade in day trading, it's much more complex because the discretion,
[12:01] reaction time, and the need to make real-time decisions are overwhelming and force you to act quickly without time to ask if what you 're doing really makes sense. Therefore, it's much harder to follow
[12:14] a trading plan as a day trader than as a swing trader. And these would be the pros of swing trading. There are obviously many more, from my for the comments. I want to read your thoughts and see if you...  This happens in some other ways that I may
[12:27] negative aspects, the flip side. The first and most important, might interest you most, is that the profits—there are always exceptions— are usually lower for swing traders than for day traders. This is
[12:41] the number of trades a swing trader makes throughout the year, is smaller than that swing trader, you'll have to use leverage or risk more money if you want to earn the same as a day trader. Because the day trader makes so many trades, they can
[12:55] dilute their risk much more, making each trade greatly helps the day trader to have more significant gains and confidence in their trading. Because they trade so frequently, it's
[13:09] high profits and quickly recover from losing periods. In contrast, a swing trader, trading so infrequently, finds it very difficult to obtain very high profits, as we said before. Perhaps it 's easier.  Making money as a swing
[13:22] money as a swing trader, to put it simply. And again, there are always another drawback I've already mentioned is the level of confidence you need psychological confidence in what you're doing. This is one of the
[13:38] cornerstones of any trader. If you don't trust your strategy, it's easy to trust your strategy, it's easy to yourself, and that will prevent you from ever achieving results. As a swing
[13:50] trader, it's very likely you'll go through losing, just that the number of trades you've made hasn't yet
[14:02] might have fallen into a negative period with the strategy, and in the long run, it may continue to be profitable, but when that losing period becomes very long, if you don't have enough confidence in that strategy, you're very likely to
[14:15] results you expect. Furthermore, as a swing trader, this is another drawback...  What I've been thinking is that it's very difficult to become emotionally attached to a strategy. And that be bad, since you never fully enter that zone that everyone
[14:29] wants to reach and that many of us aspire to reach when we trade. When you're a swing trader, it's much more difficult to find your optimal equilibrium point with a specific strategy and to know it in depth
[14:43] than that of a day trader. A day trader is constantly with that strategy, practicing with it day after day for many hours, and that greatly increases the degree of emotional attachment to it, making
[14:57] strategy. As a day trader, having several strategies and being more diversified makes it easier to discard each one without getting attached, so to speak. And I repeat, that fact that you are totally objective, but also that negative side in
[15:11] which you never achieve total confluence with what you are doing in the for example, as happened during COVID, and there are moments of high volatility or there are A restructuring of market volume will take a swing trader
[15:24] much longer to adapt because it's more difficult for them to see what's a day trader, the fourth con that comes to mind is the issue of swaps, the commissions paid for holding a position open from one day to the
[15:38] next. Swing traders don't pay as many commissions as we this added cost that day traders don't. We pay maintenance fees for our trades, so if you have a
[15:50] swing trading operation that lasts for a long time, for days or expense that you must subtract when your profits. So, if you're a swing trader who makes few trades throughout
[16:03] the year and keeps them open for a long time, variance might cause you to experience a losing streak and also make you positions open with the swaps. Likewise, the next con is...
[16:16] One of the most important things I 've noticed is that it's much harder to scale profits with a swing trading strategy versus a ability to make so many trades and operate at such high volumes that it's
[16:30] easier to be efficient and effective.  When it comes to using your risk, with as a day trader if you're very good, and we've seen that this is difficult; that is, it's easier to be a winning swing trader than a winning day trader. But on the other hand,
[16:43] swing trading, in this case, although it's easier to win with swing trading, it's more difficult to scale it and generate very high profit volumes. For that, you always need access to external capital or to significantly increase your
[16:56] because you don't normally have wide stops; there are always exceptions, but normally you have wide stops, and therefore it's much more difficult to find very positive ratios because to cover that risk-reward ratio in the
[17:10] markets you're going to need very long, very large movements that occur rarely. can make in those operations with many positive ratios are fewer than a day trader, so the only solution is to use more leverage, to increase
[17:23] trades, increasing the probability of ruin and downturns. So it swing trading strategy than a day trading strategy. And finally, psychologically, Being a swing trader has its advantages, but it also has its disadvantages.
[17:38] For example, insomnia can occur due to your open trades. It's easier to disconnect from trading when you're a day trader and finish your trading day than when you're a swing trader. As a swing
[17:51] whether your open trades are going against you or in your favor, and it's monitoring how they're performing. Add to that the mistrust we mentioned earlier, which is easy to develop during drawdown periods,
[18:05] feel from not achieving your goals in a short timeframe. Psychologically, swing trading also requires very specific characteristics to be developed optimally. So,
[18:17] enjoyed the video about the pros and cons of swing trading. I objective as possible, without trying to make you think I 'm a swing trader, which is what I truly represents me.  Where I truly believe there's an edge in the market and
[18:32] I also know winning traders and it's possible to profit in that niche as well. However, it's winning swing traders than winning day traders. So now it's your turn, on the table. Evaluate each of our pros and cons and see
[18:46] which one best fits your lifestyle. In the next video, I'm going to talk explain some of the pros and cons that I haven't explained here and that would being a swing trader versus a day trader. So don't
[19:00] miss that video, I assure you that you'll really like it. I hope you forget to give it a thumbs up, as it always helps me continue creating content the channel if you haven't already; it's just one click and it really helps the creator, as
[19:13] subscribers, which is quite an important milestone.  From my point of view, of very grateful. I wish you lots of profit in the markets, traders. See you in the the markets, traders. See you in the next video, and have a great day. Bye!