What Is Swing Trading?
Swing trading is the practice of holding positions for several days to a few weeks, targeting moves of 5-20% per trade. Entries are typically based on technical setups; exits are based on either reaching a target, hitting a stop, or breakdown of the trend.
Compared to day trading, swing trading has fewer trades (and thus lower transaction-cost drag), doesn't require constant screen time, and isn't subject to the PDT rule. The trade-off is overnight risk — gaps on news can hit stops at very unfavorable prices.
Swing trading is generally the most realistic style for retail traders. It allows holding a day job, reduces transaction costs, and lets you take advantage of multi-day technical patterns that don't exist on intraday timeframes. Most retail strategies that genuinely work are swing-trading strategies.
Related terms
- Day Trading — Opening and closing all positions within the same trading day, holding no overnight risk.