Swing Trading as a business

First, we need to understand the difference between short-term trading and long-term trading. Swing trading is a type of short-term trading.

	Short-Term Trading	Long-Term Trading

Goal	Profit from quick price moves	Build wealth through compounding & business growth
Holding Period	Seconds to Days	6 months to 5+ years
Approach	Multiple entries & exits	Buy & hold
Analysis	Technical analysis	Fundamental analysis
Risk Level	Higher	Lower but subject to business/market cycles
Transaction Costs	High	Low
Time	Constant monitoring required	Periodic portfolio review
Best For	Traders who want fast profits and can manage risk actively	Investors who want steady wealth creation with patience

Swing Trading

A trading style where positions are held for a few days to a few weeks, aiming to capture medium-term price “swings.”

Swing traders aim for profit from short- to medium-term momentum and trend reversals using technical analysis.

Benefits of swing trading are:

Less screen time than intraday trading.
More potential profits per trade compared to very short-term scalping.
Works well in trending markets.

Risk factors are:

Overnight/weekend risk due to gaps.
Requires patience and discipline.

Swing Trading as a business

We can compare Swing trading to a Stationary business or a Grocery business.

Swing Trading:

Holds trades for days to weeks, without the urgency of daily turnover and trying to sell before the momentum “spoils.”
Profit depends on catching price swings before they reverse.
Must exit at the right time, otherwise profits can vanish.

Grocery business:

Buys stock (vegetables, fruits, items) and sells it within days before it spoils.
Profit depends on timing (buying at wholesale price, selling before demand drops or items expire).
Needs quick turnover to avoid losses (perishable items like fruits, vegetables, milk, and bread must be sold quickly before they spoil and become unsellable).

Stationery business:

Purchase items like pens, notebooks, and art supplies, which don’t expire quickly.
Can keep inventory for weeks or months until customers make a purchase.
The profit margin is steady, but it still requires some stock rotation.

In short, swing trading should be considered as a business with an increased probability of profitable trades in shorter time spans of days or weeks. This style of trading, as a business, is more suitable for college students, working professionals, or homemakers who might not always be able to dedicate their time due to other commitments. Homemakers can even choose swing trading as a business (refer to “Should we consider stock trading as a business?“ for clarity), which can be carried out from the comfort of their homes.