Imagine I offered you two setups with identical payouts.
One is an overnight swing trade.
The other is a day trade lasting seconds.
Which would you prefer?
This isn’t an easy question to answer, but it’s CRITICAL to every trader’s long-term success.
Being halfway across the world opening schools in Bali, it would certainly be easier for me to swing trade.
But that doesn’t mean it’s the BEST setup for me or you.
The better question to ask is, ‘How do I choose the right trade for me?”
To answer that, I want you to set aside any preconceived notions you have about swing or day trading.
I’m going to present you two trades I took this week:
- Vision Energy Corp. (OTC: VENG), a fast morning dip buy
- GlycoMemetics Inc. (NASDAQ: GLYC), a first green day overnight hold
The YouTube video below analyzes both in great detail.
Then, I’ll cover the pros and cons of each setup so you can answer the ULTIMATE question.
If I could teach you anything, let it be my morning panic dip buys.
This is by far my favorite setup because it’s both consistent and common.
You can find it in NASDAQ stocks just as often as OTCs.
VENG is a perfect example of a morning panic that played out to perfection.
Morning panic dip buys scare a lot of traders.
The phrase ‘don’t catch a falling knife’ gets stuck in their head and they can’t see past it.
Let me clear something up.
I don’t just grab stocks in freefall hoping for a bounce.
Nor do I buy a stock just because it hit a specific support level.
I combine my knowledge of stop losses, short sellers, price action, and promoters to identify the ideal price and time to enter a trade.
While that sounds straightforward, it takes practice, like any skill.
Thus, it requires a bit more work and preparation to achieve success.
1st Green Day Swings
Most folks prefer swing trades because they require less work.
You have more flexibility to analyze charts and place trades on your schedule.
But they require a lot more patience.
Plus, I tend to only trade this pattern on OTC stocks.
GLYC presents this setup perfectly.
After a strong run, GLYC consolidated for several weeks in a narrow range.
It broke out on huge volume, creating a large green candlestick.
My idea was to buy the stock near the close and look for a gap up into the next day’s open.
However, there’s an additional risk with swing trades you don’t get with day trades – overnight news.
I trade penny stocks that follow my 7-Step Penny Stock Framework knowing they’ll eventually fail.
Nothing prevents that from happening one day to the next.
I can buy near the high and wake up the next day to a huge gap down.
With day trades, the risk is easier to define and stop out for a small loss.
You don’t get that luxury with a swing trade.
When you hold overnight, you’re stuck with the stock until the premarket the following day.
That can lead to larger losses than day trades.
I have more control over where I enter and exit a day trade than I do with a swing trade.
That makes it easier to lose small and fast.
Regardless of which setup you choose, realize they both follow the same framework.
With thousands of hours of content, there is something for everyone, regardless of your account size, experience, or success.