Short-term trading (holding positions for days, hours, or even minutes) is the most tempting and the most dangerous part of the market. It can teach you a lot, but it can also destroy your capital if you treat it like a game.

14.1 Who Short-Term Trading Is For (And Who Should Avoid It)

Short-term trading may fit you if:

• You genuinely enjoy markets and pattern analysis.
• You have the time and discipline to follow a written plan.
• You can handle taking many small losses without emotional meltdown.

You should avoid (or delay) short-term trading if:

• You are still building an emergency fund or paying high-interest debt.
• You can’t check markets during the day but want to day-trade anyway.
• You know you tend to chase, panic, or gamble when stressed.

You can be a successful long-term investor without ever doing short-term trading. Long-term, buy-and-hold strategies have historically outperformed the average active trader, especially after costs and taxes.

14.2 Day Trading vs Swing Trading

Two main short-term styles:

• Day Trading
  • All positions opened and closed within the same day.
  • Requires constant screen time and fast decisions.
  • High frequency, high stress, often higher transaction and mental costs.
• Swing Trading
  • Positions held for several days to a few weeks, sometimes a bit longer.
  • Aims to capture “swings” in price, not intraday noise.
  • Fewer trades, less screen time than day trading, but still active.

For most beginners with jobs and normal lives, if they try any short-term style at all, swing trading is usually more realistic than full-time day trading.

14.3 Pros and Cons vs Long-Term Investing

Pros of Short-Term Trading

• Fast feedback and learning (you see results quickly).
• Potential to profit in flat or choppy markets where long-term investors just wait.