swing trading

Understanding the Balance between Short and Long Term Stock Trading

| Swing Alpha on 7 Mar 2017 12:00 AM
Understanding the Balance between Short and Long Term Stock Trading

Stock market traders usually belong to one of the two stereotypes. They either work to perform short term investments, or work towards achieving long term targets. What people do not understand, is that these two trading techniques are mutually exclusive and you can use both of them simultaneously. However, it is essential that you learn to balance these opposing strategies. Here, we describe some important elements that will help you balance your stock market investments.

Understanding Short Term Trading

Short term investing refers to trading, which is designed to produce fruitful results within one year of market entry. Some investors, in fact, have started to perform day trading, in which investments change every single day. Short term trading gets more difficult as you decrease the holding time for particular stock commodities. It takes time and effort to succeed in short term investing, but it allows you to gain quick investment returns.

The Benefits

Short term trading is perfect for you if you are looking to gain immediate results. This is perfect if you are a small investor, and are simply looking to add a mode of income stream to complement your day job. You will need to however, spend a significant amount of time to understand the dynamics of the stock market and enjoy the benefits on offer. You can use small investments as well in this case.

Understanding Long Term Trading

Stock market is truly a place for long term investing. Stock shares produce dividends each year, as well as appreciate in value, if the business is doing well. This investment is done for a period of at least over a single year. A long term investment is all about appreciating your winning investments, while keeping hold of your losing ones for future gains.

The Benefits

Long term trading is more secure, and if you do not have a lot of free time, then it is perfect for you. You can simply select the stocks of rising companies, especially belonging to the technology industry. You can then allow your stocks to appreciate over a time period of around five to ten years. You can then cash in whenever you feel the profit is ripe enough for you.

The Balancing Act

You need to balance your investment risk, by using both of the above-mentioned strategies. You can only act well, if you understand your particular investment needs. First, you need to analyze your personal investment goals. This means that you should assess, whether you require immediate benefits, or are willing to wait for a few years to make good on your investment ventures.

You should never respond to short term market changes. You should diversity your stocks ideally by investing 25% in short term trading, while keeping the larger part of 75% in long term trading. This will ideally provide you monthly benefits, as well as allow you to build up investments over time.


It is essential that you learn about the current stock market trends through analysis and technical information. Swing Alpha can help you in this regard, and work with you to balance your short and long term trading activities in the right way.

3 Mar 2017 4:38 PM | Anonymous

Copyright © 2017 Swing Alpha, LLC