When it comes to short-term Bitcoin Trading, there are two concepts that most people choose from- Intraday Trading and Swing Trading. Each has its pros, cons, and outcomes, but it will serve the same purpose at the end of the day.
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Intraday Trading or Day trading is the trading that is quite famous and is best for the people who have just entered the market. Just like the name suggests, it is trading for the day. When the day starts, and the market opens, traders can trade on their chosen currency or security. But they need to be careful and plan for that.
When the market is about the close, the trader will complete all their trades and make all the moves that they can make. The traders can earn the profits in small amounts, but it does require higher skills and expertise knowledge. A person with patience can only do day trading as the market fluctuates several times a day.
Advantages of Cryptocurrency Intraday Trading
Here are some of the advantages that you can experience from Intraday Trading-
- There will be no overnight risk as the trader will sell everything before the market closes.
- The main benefit traders can experience is that their profits today can be sued the next day to make larger trades.
- Compared to the swing trader, the capital you need in Intraday Trading is less.
Disadvantages of Cryptocurrency Intraday Trading
Along with the advantages, here are some of the disadvantages that you can experience-
- As it is day trading, there is pressure on the trader to make the best decision which may end up wrong sometimes.
- If you are trading through a broker, you need to pay more commission to them as you need to trade more.
- You need to devote all your day in front of the screen.
In a day, the price fluctuates in the range, which may increase the higher risk. The more money you will invest more risk will be there. Here are some of the risks involved-
- Market volatility risk
- Risk of excessive exposure
- Stock selection risk
Cryptocurrency Swing Trading
Swing Trading is the trading where the traders need to hold that position for some time. The period in swing trading is not fixed, which can be short or long depending on the coins/security/assets. You need to wait for the profits that you can get from trading. The exact time and position in the swing trading can be determined through monitoring news, past trends, or when you keep yourself updated with current events.
In swing trading, you will require less attention to monitor them; you do not have to open the position many times. The main motive to get profits through the swing trades is when you make meaningful trades. It will also involve risk, but the higher the risk, the higher the profit.
Advantages of Cryptocurrency Swing Trading
Some advantages of swing trading are-
- They can target a large amount of money as you can also trade for a long time to get good profits.
- You do not have to devote all day as you require only two-three hours for trading.
- When you open fewer positions, there will be less risk to the open.
Disadvantages of Cryptocurrency Swing Trading
Some disadvantages of swing trading are-
- There will be an overnight risk
- The brokers may charge higher swap fees.
- There will also be a risk from the news events as these can fluctuate the currency’s price and wipe out your profits.
For swing trading, you will need time, and when the position is open, there will be an increased risk of change in the condition. It is for a longer time, which will also cause more risk.
Comparison between Intraday and Swing
When you compare both, you will know that Intraday Trading is way better than swing trading because you will not know how much time you need to trade in the swing. It can be for a day or even a week, which might not be better for you. But on the other hand, in Intraday Trading, the traders have to sit for a day. Then, when the market closes, they are free with the amount of profit in their hand.
Not just the time, but when it comes to profit or risk, intraday is best; you will not have to face any overnight risk or anything. But, at the same time, Swing trader does have to face the overnight risk, which will result in stress or hypertension.
At last, both the trading has its advantages and disadvantages; the traders need to learn about both and then choose what is best for them. They have their schedule and the risk they want to take.