Many people hold a misconception about the word “trading.” The common image that comes to mind is of someone sitting in front of several screens, making rapid trades throughout the day with extraordinary precision. However, trading is not limited to this high-intensity style. In reality, a trader can be successful without constantly monitoring the markets, by following well-defined strategies, managing risk effectively, and focusing on quality setups rather than quantity of trades.

In this newsletter, let us understand Scalping and Swing Trading, and learn who they are ideal for.

Understanding Scalping

Scalping is precisely the kind of trading often depicted in the common stereotype. It involves a trader sitting in front of screens, executing multiple trades with precision throughout the day. These traders focus on very small timeframes, such as 5-minute or 3-minute charts, and their market view can change several times within an hour.

For example, consider a stock on a higher timeframe such as the Daily or Weekly OHLC chart, or on a 1% Point and Figure or Renko chart. The price may be trending up, moving sideways, or in a downtrend. A scalper will experience these situations repeatedly during the day and make trades based on the short-term movements they observe.

Does this mean you should pursue scalping? The answer depends on several factors such as the amount of time you can dedicate to watching the markets, your comfort level with trading leveraged products like futures and options, your ability to maintain discipline when a trade goes against you, and most importantly, your skill and experience in reading charts with precision. If you are new to trading and lack experience in chart analysis, it is advisable to avoid scalping until you have developed sufficient knowledge and confidence to handle its fast-paced demands.

Many traders fall into the trap of rushing into scalping, driven by the belief that they can earn substantial profits in a short time. The reality, however, is far less glamorous. Scalping is extremely challenging, mentally exhausting, and often an emotional rollercoaster. This is the side of scalping that is rarely spoken about, but it is essential to understand before deciding to engage in it.

Understanding Swing Trading

On the other side of the spectrum is Swing Trading, where traders enter a position and hold it for a few weeks with the objective of making a reasonable profit. Unlike scalpers, swing traders are not in a rush to execute multiple trades each day. They rely on charts with timeframes such as the Daily on OHLC or 1% on Renko and Point and Figure charts to form a view for the coming days or weeks. The goal is straightforward: spend less time in front of the screen while still participating in profitable opportunities, without the pressure of making rapid decisions or constantly monitoring open positions.

This style of trading is more relaxed and measured compared to scalping. Traders often begin by trading stocks in the cash market and later progress to leveraged products such as futures or options. The success of swing trading depends on identifying high-quality setups, implementing a sound risk management framework, maintaining discipline to follow the plan, and having the skill to interpret charts effectively. Unlike scalping, swing trading allows a greater margin for error, making it comparatively less stressful while still requiring precision and consistency.

Which type of trading should you do?

Choosing the right trading style is personal. You may prefer scalping, swing trading, or something entirely different. Success is not about trading more often or having the latest technology—it is about finding a method that fits your strengths and lifestyle. With TNT One membership, you will gain practical knowledge in multiple charting techniques, risk management, momentum investing, and investment avenues like mutual funds, along with access to a vibrant TNT One community group and weekly market analysis by Prof. Kaushik Akiwatkar.

If you want to learn trading, let me be your mentor at every step of the way through TNT One. Check it out now 👇👇👇