Swing trading involves holding a position for more than one day, usually anywhere from 2 to 10 business days. The goal is to capture a directional move that plays out over several days.
Swing traders rely on a catalyst to drive the move. That catalyst might be an earnings beat, an analyst upgrade, a product launch, a sector rotation, or simply a strong technical setup.
Unlike day trading, swing trading does not require you to watch charts all day. You can set your entry, stop loss, and target in the morning, check in once or twice, and let the trade run.
Swing trading is less affected by the PDT rule. Holding a position overnight means the trade does not count as a day trade under the PDT definition, so you can swing trade freely even with an account under $25,000.
The main risk of swing trading is overnight and weekend gaps. If a company releases bad news after hours, the stock can open 30% lower the next morning, bypassing your stop loss entirely.