Based on research we know 70% of market moves occurs over only 30% of the time. The rest of the time, the markets are “digesting” the previous move. The buy and hold trader is willing to sit through those periods of digestion that can last months. On the other hand, the nimble Swing Trader will carefully pick spots to enter and exit trades and still take advantage of the larger moves without the excessive risks involved with buy and hold.
Between inactivity and constant activity, swing trading enables you to allocate your money into several trades a day to take advantage of current opportunities in the market without ensnaring all of your capital and without chaining you to your computer. All our trades are placed the night before each trading day then all you have to do from that point on is monitor them, if you want. Or you can just let the market do what the market does and fill positions when the limit price is hit. This gives you flexibility and maneuverability because it allows you to trade the market regardless if you have a full-time day job or not.
Swing Trading is the art and science of profiting from securities short term price movement spanning a few days to a few weeks.
Swing traders are rarely invested 100% and would rather
wait for the perfect setup and attempt to take part of a move.
If you’re a buy and hold investor you don’t care about price swings and you don’t short. You study, study and study some more to identify candidates you hope will appreciate over time. Whereas swing traders will take advantage of short term price swings and are not looking for long term appreciation.
Buy and Hold investors are concerned with wealth preservation and growth and are willing to wait a long time for their investment to grow. Swing traders are more concerned about income generation.