Swing trading as opposed to day trading is where a trader buys a specific stock and holds it until there is a significant change in the value of the stock. Time that the stock is held varies from a few hours to a few days or even perhaps weeks. The trader will sell the stock when there is a sufficient movement in the price of the stock to gain profit. Expert traders who have mastered this kind of trading do so by prospecting changes in price caused by optimism and pessimism of a certain symbol.

Before one buys a stock anticipating to sell it at a profit, one must do a thorough analysis of the symbol which include but not limited to past performances through charts, trading software, current company news highlighting company’s possible growth. In order to maximize your gain, you should buy the stock during low price brought by pessimism.

On the other hand, day trading involves buying of stock and selling it before the market closes the same day usually done by bank and investment firm employees. Also due to advancement in technology and electronic trading, more and more home traders have joined this kind of trading. Day trading can be very risky therefore requiring the trader to be well educated and funded to capitalize on small price movements in highly liquid stocks. In order to trade lucratively, one must develop tactics and strategies such as swing trading, being on top of trading news, using day trading software among others. It can be a risky business but many have made millions a year.

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