We believe there are more swings than ever. Our data shows that day trading makes you more volatile than swing traders, particularly with respect to the long-term return of mutual funds.
Swing trading is a great way to have fun, but it’s also risky. So if you enjoy doing so, then we recommend that you keep things in perspective — take the time to trade with a portfolio that you can afford to lose money on.
But if you think having fun is more important than keeping up with risk, then swing trading might be a good opportunity for you!
How do I take advantage of a swing trading opportunity? Are there advantages to doing this?
Yes, swings can be very lucrative! For example, if your portfolio is less volatile, then a trade like the one below can net you up to 25% more profits.
It’s not uncommon to trade with a portfolio that is slightly volatile like this. But even if your fund is the highest performing in your asset class, your long-term investment decisions may not be very different if you trade the exact same strategy as the top performers.
Instead, you want to focus on optimizing your trading strategy so that you’re picking the ones that are providing the greatest overall return (without exceeding your risk tolerance at the same time!).
So if you want to take advantage of opportunities, you need to first know which funds are attracting the most interest from investors.
You can use our new free investment calculator, which will let you see the performance of your investment options and find funds that are earning the highest rates of returns. You can also use our research tool to see which strategies produce the highest returns.
Swing trading can be even more attractive on longer time frames. In our research tool and research calculator, we’ve found that long-term investors are more likely to have been winners in market fluctuations in the last 12 months than short-term investors.
To test that out, we created a fund and tracked its performance for the last 12 months. When we looked at both portfolios, we found that the long-term investor was much wealthier than the short-term investor.
In the results below, we have shown the actual results with a 1 month time horizon, the exact same portfolio, and a 1 week time horizon and calculated how the performance was affected by trading one type of portfolio. Both funds did very well.
We used the same strategies to track and build a portfolio for both long-
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