When it comes to learning a new trading technique, such as a swing trading strategy it can become a worry. Such as, is swing trading profitable? If this is one of your concerns, then you’re in the right place!
Swing trading is going to be profitable, in fact it is also more profitable than day trading. But, as with any style of trading, swing trading can also result in substantial losses. A swing trading success rate will be higher, making it a profitable type of trading. With less stress and more time to monitor your trades.
Plus… don’t miss your opportunity to an introduction to swing trading, and learn some swing trading strategies you can start with today!
Is Swing Trading Profitable?
At a point every type of trading will be profitable, it depends on how you approach using the type of trading. But this doesn’t answer the question is swing trading profitable?
Take my word for it, talk to any day trader, swing trader or position trader and see which one tells you they are profitable. You will most probably find nine times out of ten, they will all tell you they are profitable.
Now why is that?
Especially when it’s so obvious that the majority of traders out there lose money! The main reasons most traders lose is;
- Poor risk management and trade management
- Broker transaction costs
- Too little capital to trade with
- Lack of control with their emotions
- High taxes on profits made
That being said…
You are going to find many traders out their who do in fact make money in Forex trading, day after day, month after month and year after year. But this article is about “is swing trading profitable“, some of the top earners in trading are in fact swing traders like Paul Tudor Jones.
Reasons why is swing trading profitable are;
- Unlike Day trading, Swing trading isn’t a full time pursuit
- Losing trades can be limited using a swing trading strategy
- Able to plan in advance for any trade entries
- Higher potential returns trading the market rallies in a trend
Over the years trading the Forex markets, I have tried all types of trading. From scalping the markets with day trading. A longer term approach with position trading and now swing trading.
So… when I say swing trading is more profitable, I am talking from experience.
Swing trading gave me the freedom to trade just the Daily time frame. This then meant I only had to check the charts once a day. Compared to having to watch the charts all day long when day trading. A bit like watching paint drying if I’m honest.
This brings me to the next question you probably now have which is, is day trading or swing trading more profitable?
Is Day Trading Or Swing Trading More Profitable?
I started, like many of you, in day trading.. here’s my story:
Ever since I heard about people making money in trading, I felt that this must be the DREAM job. Making money from anywhere in the world.. without a boss and commitments to workplace or hours. I read a LOT about trading but I lacked one thing..
…Skills and Experience!
So I knew to become a consistent and a profitable trader I needed to learn the markets, which you can learn the same steps I took in a recent article I wrote and become a profitable trader by clicking here. With how they moved and to get some experience behind my trading.
I looked desperately for a way to combine working with trying to learn and trade the markets. Eventually I found out about swing trading. Just as you now here on this trading article, I asked the same question is swing trading profitable? So I started to focus and analysed only the 4-hour and daily charts.
As like the chart illustrated above, I now trade only using the 4-hour and Daily charts. And I found out that Swing trading is MUCH EASIER!
When I started trading, I used to only trade with the 5-minute and 15-minute charts as illustrated in the chart above, with the 5-minute chart. You can see how choppy this time frame can be. I would try to trade when ever I used to get time after work generally in the evenings.
This used up so much of my personal time, not to mention less time being spent with the family. The whole point of looking to live the dream as a trader was to have more time with the family not less!
In these lower time frames you must have super-precision in your entries and one tiny error or late response can turn a winning trade into a disaster. But… swing trading is completely different to this, in fact I had more time to prepare and less time at the screen checking for trades.
If you want more freedom?
A swing trading strategy is for you, not to mention it is much more profitable then day trading! Plus unlike day trading, where your stress levels are going to much greater. Swing trading is going to be much less stress! This alone makes swing trading more profitable. Why not find out how you can create your own swing trading strategy on another article I’ve written by clicking here.
Other reasons why swing trading is more profitable then day trading;
- Risk level is much smaller in swing trading
- Traders come more confident using swing trading
- Trade and broker costs are much lower
- Less risk with news announcements
- Avoid choppiness as with smaller time frames
So there you have it, for me swing trading is by far the more profitable type of trading of the two. So this is, yet another answer to your main question of, is swing trading profitable. If you want to learn more on the different types of trading, take a look at my latest article I wrote by clicking here and see which one best fits you. Lets now take a look at what a swing trading success rate looks like.
Swing Trading Success Rate
Lets look back… to is day trading or swing trading more profitable. You now understand the reasons why swing trading is going to be far the more profitable of the two types of trading.
The main reason why swing trading success rate is very high, compared to lets say day trading. Is because those who are attempting to day trade the markets. Are not prepared mentally for what’s involved, and are looking for a “get rich quick” plan.
You have most probably heard of the 95% of retail traders actually fail in Forex trading. Yet the majority of these traders try to control what they lose when trading the markets. They must be doing something wrong, and they are!
This is why a swing trading success rate is going to be higher then day trading. Because day traders will allow losers to run than controlling them and their risk. Day traders might have a high win rate but still lose more than they make. Purely because they close out too early with the fear of losing out.
Emotions are a big factor with trading, where day trading the emotions will pay a large factor with the success rate. Swing trading success rate isn’t affected in the same way. This is because of there being LESS STRESS!
Another high factor with a swing trading success rate is going to be the win rate percentage. Lets look at some numbers and compare what a day trading and swing trading win rate might look like.
Compare two traders, one called Barry who is a day trader. He has a win rate of lets say 80% which is very high. He has taken 10 trades in total, with a average win of £300 on 8 trades. But because of being a day trader his emotions take control and he takes an average loss of £800 on two trades.
This leaves Barry with a £800 profit. Not too bad for a day trader!
Now lest look at our swing trader called Larry, he’s only got a swing trading success rate of 50%. Much lower than Barry’s win rate, with him only winning 5 trades out of the 10. But his average winner was £1000 per trade, and his average loser was only £500 per trade.
This means Larry made a healthy profit of £2500!
So the success rate of a trading style, doesn’t need to have a high win rate to be more profitable. This is why swing trading will give you a higher success rate, with the benefits with swing trading as highlighted earlier on in this lesson.
Average Income Of A Swing Trader?
To answer this question of the average income of a swing trader is really going to be down to the individual trader and their experience. Plus other reasons that effect their income are;
- How much money they have to trade in the markets with
- The ability or the experience of trading the markets
- The time of day they look to swing trade, can be country based
- The overall win to loss ratio of their taken trades
- How often you trade and win
- The way the trader manages their trades around high impact news
So with many circumstances that can effect a traders income, it would be hard to say for definitely how much a swing trader could potentially earn. But.. you know the answer to is swing trading profitable, it’s not a case you would not make money with swing trading.
It’s just going to be hard to say what amount you could potentially earn using it. Lets look at some figures to give you an idea, a trader using a £2000 account size compared to another trader using a £20,000 account size. The overall percentage gain for a trading year wouldn’t be any different.
But the actual amount in income of course would be greater using a larger account balance.
Lets look at what you could potentially earn from using a £20,000 starting balance. As a swing trader, you will be aiming for a 3-1 risk to reward targets. Risking only a max of 2% of your account size per trade.
Your monthly income would be as follows-
3 trades are profitable: 3 x £1200 = £3600
2 trades lose: 2 x £400 = £800
Monthly Gross Income = £2800 (attained from £3600- £800)
That’s a 14% monthly return, or 168% yearly return (uncompounded).
Obviously, depending on your broker of choice, there will be fees to pay especially if you’re using a ENC broker account. But you can see from this example, and idea of potential returns using a swing trading system to trade with.
If swing trading is a strategy you want to learn, then there is nothing better then checking out my latest article all about an introduction to swing trading.
Introduction To Swing Trading
If you’re looking for an introduction to swing trading, with now knowing the answer to this question, “is swing trading profitable?” Then this trading article will complement it perfectly.
Learn exactly what swing trading is all about?
With my ultimate guide, you can find out exactly what the swing trading basics are! What swing trading strategies you can use and which markets to trade using a swing trading system.
Also learn how you can add the use of simple moving averages, and knowing where your profit targets will be. Plus find out the pros and cons to swing trading.
Want to learn more now, then head over to my introduction to swing trading article by clicking here. Or just watch the video below…
Swing Trading Strategies
Choosing the right swing trading strategies with your trading, is going to be what gives you success in trading Forex!
With swing trading, you have a few options when it comes to swing trading strategies. When swing trading you may examine the charts with a longer term approach in mind.
More known as trend traders!
Using fundamental analysis in your swing trading to make decisions in your trades. Where you can hold trades from periods such as weeks or even months at a time. This swing trading strategy is more known as position trading.
Another swing trading strategy, is targeting shorter term trends. Where you would hold these trades from a week to several weeks at a time. This type of swing trading strategy is known as swing trading and being the middle of the continuum.
Understanding how the markets move in a trending phase is crucial when being a swing trader. So lets take a look at what a down trend would look like when understanding swings within the markets.
Notice how in a downtrend, with using a swinging pattern. Price creates lower highs and lower lows. It will be using a swing trading strategy, you would look to take sell trades as prices creates the lower highs in the market.
The opposite would be true with an up trend, and when looking to buy in the market, you would be looking for any signals to get long at the higher lows. Lets take a look at the illustration below of what this would look like with price.
When putting this all together, you will then have a swing trading system you can use to pull consistent profits out of the markets. Now that you know… is swing trading profitable! Start now with getting my free swing trading guide clicking the link below;
Then, check out my free swing trading system, and learn a solid strategy you can use now to trade the markets.
But… If you are looking for something more powerful to trade the markets with, then you should check out my swing trading naked course clicking here.
What you’ve learnt in today’s trading article!
With is swing trading profitable?
You now know, it indeed is going to be a profitable trading with a swing trading strategy. And that swing trading is far more profitable than using a day trading strategy.
You’ve learnt that a swing trading success rate is going to be based on each individual traders experience and skills within the markets. Mainly because day traders are looking for a get-rich-plan. Where swing traders are going to be looking for a long term endeavour and having less stress.
An average income of a swing trader will be based on many different scenarios. And there will be many circumstances that can effect a traders income. But you learnt the possibilities of making a high yearly income is indeed possible when applying a swing trading strategy.
I covered my introduction to swing trading, where you can learn the basics to swing trading and what swing trading strategies you can use. With outlining my free swing trading system you can start with in the markets today!
For more trading articles click here.