Tag: day trader

Does this crash make a case for variable Margin Lending rates?

There have been umpteen opinions on how margin trading can make or break people’s trading careers. While for some traders (typically with deep pockets), margin trading is a way of life, trading on margin has also been suicidal for many an amateur trader. The China stock market crash was the latest example of what over-leveraged margin trading can lead to – what with “grandmas, cab drivers, college kids using mobile apps for margin trading”!

As far as our US markets are concerned, a quick look through most brokers’ margin account rates reveals that everyone offers lending rate slabs basis the size of account you hold with them. No surprisingly, Continue Reading…

Are you a Day Trader? Or a Swing Trader?

While day trading and swing trading both follow a short-term trading strategy and look for short-term profits, looking at price fluctuations. However, there are some key differences between the two types of traders, acknowledging which, should help us understand trading better and be better traders ourselves!

1. Number of trades per day: This one is obvious – if you’re a Day Trader, you will need to be making at least one trade every day! You might just need to be sure you don’t overdo on the manual decision making. That’s probably fraught with danger.

A Swing Trader, on the other hand, “waits” for the stock to swing to the other side in order to make a decision. It could take days, sometimes even a couple of weeks.

2. Capital needs: A Swing Trader typically needs more money than a Day Trader because she does not turn her cash around as fast as the Day Trader.

3. Rewards: A Day Trader gets rewarded faster than a Swing Trader, of course, since she completes the buy/sell on the same day. The Swing Trader, on the other hand, may sometimes actually end up making more money on a per ticker basis.

4. Risks involved: Swing Trading, by nature, appears less risky because of the lesser margin involved (margin from trade, used for another). However, a Day Trader exercises more control on the trades and therefore mitigates any incumbent risk better than the Swing Trader.

So, where do you see yourself? Day Trading or Swing Trading?