Day Trading
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually (but not necessarily always) closed before the market close of the trading day. This is different from after-hours trading. Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures. Day Trading involves taking a position in the markets with a view of squaring that position before the end of that day. A day trader typically trades several times a day looking for fractions of a point to a few points per trade, but who close out all their positions by day's end.The goal of a day trader is to capitalize on price movement within one trading day. Unlike investors, a day trader may hold positions for only a few seconds or minutes, and never overnight. This is really the safest way to do day trading because you are not exposed to the potential losses that can occur when the stock market is closed due to news - globally or internally or politically - that can affect the prices of your stocks. Day trader should have the skill of identifying the trading stocks at a particular day to buy at bottom and sell at top.There is minimum risk if you are taking minimum profit. Unfortunately, many people who claim or supposed to be "day trading," hold stocks overnight because of fear or greed, thus setting themselves up for the catastrophic elimination of their capital.
Advantages of Day Trading
Zero Overnight Risk : Since positions are closed prior to the end of the trading day, news and events that affect the next trading day's opening prices do not effect your portfolio. Increased Leverage: Day Traders have a greater leverage on their trading capital because of low margin requirements as their trades that are closed in the same market day. This increased leverage can increase your profits if used wisely. There are a lot of brokers helping the day trader in picking the day trading stocks, many of them are paid services in which they give advices through sms , chat, newletters or phone call. Day trading without the help of any helping agency is a risky attempt. Short selling can be done to take advantage of declining stock prices. Eventhough no one can predict accurately , the trader can use his talent and experiance to be selective in picking up their advice. But for a novice trader it is better to learn the patterns carefully for atleast a month before going into active trade.
Swing trading
Swing trading sits in the middle of the continuum between day trading and trend following. Swing traders hold a particular stock for a period of time, generally between a few days and two or three weeks, and trade the stock on the basis of its intra-week or intra-month oscillations between optimism and pessimism.It should be noted that in either of the two market extremes, the bear-market environment or bull market, swing trading proves to be a rather different challenge than in a market that is between these two extremes. In a bear market or a bull market, momentum will generally carry stocks for a long period of time in one direction only, thereby ensuring that the best strategy will be to trade on the basis of the longer-term directional trend.