Scalping vs Swing Trading: Understanding the Differences

2025.08.27 2025.08.27
Scalping vs Swing Trading: Key Differences

Oleg Tkachenkohttps://www.litefinance.org/blog/authors/oleg-tkachenko/

Scalping and swing trading are two strategies that have similar algorithms but different underlying principles. Both of these strategies aim to generate profit from price fluctuations. Scalping is a strategy that captures profit from short-term price fluctuations, where a trade can be closed in a matter of minutes. Swing trading primarily involves leveraging corrective movements within a prevailing trend. These trades can be maintained in the market for extended periods, ranging from several hours to several days and even weeks.

This article aims to provide a comprehensive overview of the key distinctions between scalping and swing trading, delving into the distinctive features of each trading system and highlighting potential pitfalls. It also seeks to help you understand these trading methods and select the strategy that best aligns with your trading style and personality.

Major Takeaways

• Scalping refers to a type of high-frequency trading that involves profiting from short-term price fluctuations in either direction. Scalpers earn even on the slightest price fluctuations, opening several dozen, sometimes more than a hundred trades per day.

• Swing trading is a type of intraday and medium-term trading that involves taking advantage of corrections. Swing traders catch moments of price pullbacks, open a trade at the best price, and sell the asset at the beginning of the next correction.

• Both trading styles involve making profits on price fluctuations.

• A scalper can trade in either direction at any time in the market, with trades kept open for a few minutes. A swing trader opens trades according to a prevailing trend, keeping positions open for several hours to several days.

• Due to the high number of trades, scalping can be more emotionally draining. Swing traders have the time to think and choose the best moment to open or close a trade. Scalpers have significantly less time.

• The profitability of scalping and swing trading depends on skills and strategies. If a scalper has a high percentage of successful trades with insignificant losses, scalping may prove to be more profitable. If a swing trader identifies a strong trend during a significant pullback and a scalper has, for example, 40% of trades resulting in losses, the profit from the swing trading strategy will be higher.

• Scalping is a suitable strategy for active traders who can make decisions quickly and efficiently. Swing trading is a strategy particularly well-suited for patient and conservative traders. Due to the complexity involved, scalping is not recommended for novice traders.

What is Swing Trading

Swing trading is a style of trading in financial markets, the essence of which is to identify the cyclical nature of price movements.

Two key nuances of trend trading are identifying the trend’s start and corrections, and waiting for the end of a pullback, which can incur swap costs.

A swing trader does not look for trends, but rather seeks corrections and opens a trade during a pullback when the price reverses. The position closes when a new correction is imminent, determined by various day trading patterns.

Features of swing trading:

• Swing traders focus on short-term fluctuations within long-term trends. They wait for corrections to end and open a trade when a new correction starts. Some swing traders suggest earning on any fluctuations, but this sounds more like a gambling strategy. Meanwhile, trending markets are quite predictable, whereas it is quite difficult to determine the amplitude of fluctuations in a flat or turbulent market.

• Time frame – from M30 and above. More often – H1–H4. A trade is maintained in the market for several hours to several days.

• Key levels, trend lines, pivot points, Fibonacci retracement levels, and reversal patterns are frequently used trading tools.

The screenshot above shows an example of swing trading on the EURUSD chart. The red lines show the directions in which the trader opens positions. It may seem that during periods of high volatility, there are more opportunities to gain profit, but here is the catch. A swing trader cannot open new trades every time a candlestick of the opposite color appears. They are also forced to set stop-loss orders far from the entry point to ensure they do not miss out on their profits, but in this case, the potential losses will also be greater.

It is easier to earn money on fluctuations within a trend.

On the chart, there are breakouts of two strong long-term key levels. After the first correction and breakout of the support level, a short position was opened in line with the prevailing trend. The trade was closed at the beginning of a new correction, which forms a Flag pattern. A breakout of this pattern signals a continuation of the decline. Each such fluctuation within the trend can bring 35–50 points. During corrections, if you reverse the trade in their direction, you can earn about 10 points. This is a conservative swing trading strategy.

What is Scalping

Scalping is a strategy that involves capitalizing on short-term price fluctuations, irrespective of the prevailing trend. Scalpers generate profits even on the slightest price difference. They are able to perform even in a flat market; their objective is to recoup the spread costs. The trade is then executed in the market until the price goes in the opposite direction.

• Scalpers profit from even the smallest price fluctuations. They open short positions in one trade and long positions in the next, reversing them as the price changes.

• Time frames – M5–M15. If a trend is favorable, a scalp trade can be held in the market for several hours. However, most trades last only a few minutes.

• Scalpers act quickly and monitor each trade.

• A high percentage of winning trades is essential.

Example.

One of the most volatile assets is the BTCUSD pair on the M5 time frame. In certain areas, the cryptocurrency exhibits high-frequency price movements in both directions, which are associated with FUD (fear, uncertainty, and doubt) and FOMO (fear of missing out), as well as news events.

In most cases, there are at least two red or at least two green candlesticks. These are small but visible price fluctuations. The difference between the opening price of the first candlestick and the closing price of the second is about $500–$600. This is the trader’s earnings for 10 minutes, excluding the spread, assuming that the transaction volume is between $85,000 and $100,000, or $5–$6 with a position size of $850–$1,000. That is, to earn $5 in 10 minutes, you need a deposit of $85–$100 and leverage of 1:10.

Key Differences Between Swing Trading and Scalping 

Both trading strategies have one thing in common: they allow you to earn money on corrections. However, these are fundamentally different trading styles. Scalping involves active trading, and results can be achieved in a matter of minutes. Swing trading is a more conservative method. Profitability cannot be compared: a scalper opens many trades on one asset or several assets, while a swing trader can open 10 trades on different assets simultaneously.

The table below describes the differences between scalping and swing trading.

Time Frames

1. Scalpers work on M1-M5-M15 time frames. Their purpose is to make quick profits from the slightest fluctuations, so longer time frames are not suitable. Even on minute charts, you can find swing levels and patterns.

2. Swing traders earn on long-term fluctuations, so they use time frames from H1 and above. Swing trading strategies often employ multi-timeframe analysis, searching for trends and levels, for example, on the H4 chart. When a signal is identified, a trade is opened on the H1 chart. A confirming signal is a coincidence of levels on different time frames.

Risk Management

Scalpers face risks from price noise and the influence of large capital. Institutional investors can influence the price to reach the desired entry and exit points, allowing them to open trades with even larger volumes at a more favorable price. Therefore, scalpers should react instantly to price fluctuations. There is no time to set stop-loss orders, and trades are often closed manually. One-click trading and setting a grid of pending orders using scripts are some of the scalper’s favorite tools. Even the Martingale strategy is acceptable.

The swing trader’s goal is to distinguish between a false correction and a true one, as well as a correction and a new trend. Therefore, classic risk management applies here: calculating the stop level length, considering the position volume, and adjusting the position volume according to the deposit amount, etc. A stop-loss order can be manually moved to a break-even point, or a trailing stop can be used.

Additional Costs

Spread is the key for scalp traders. If the spread is 1 point, the scalper should wait for a movement of more than 1 point to earn on a trade. The longer the trade is held in the market, the higher the risk. Therefore, a narrow spread is beneficial for scalpers. They choose assets with maximum liquidity and trade on an ECN account in the case of CFD trading on Forex.

On a standard account, the spread is set by the liquidity provider + the broker's markup. It can be 1–2 pips or more in 4-digit quotes. ECN accounts do not have a single liquidity provider, so the spread is from 0.1 points. However, a fixed commission applies to each full lot. It is less than the spread costs on a standard account due to the large number of trades opened.

For swing traders, the spread size is less critical—they open one long-term trade. For targets of 20–30 points, a spread of 1 or 2 points hardly matters. However, there are swap costs—the fee for carrying the position over to the next day. A triple swap is deducted over the weekend. The swap size is specified individually for each asset in the contract specifications.

Liquidity Requirements

1. For scalpers, the most important factors are minimal spreads, no slippage, and the ability to close a trade in a fraction of a second. Their tools are trading volume and an order book. They choose major currency pairs and blue chips.

2. Liquidity is less important for swing traders. Stable trends and a moderately volatile market are key.

The USD/ZAR pair is a decent instrument for swing traders. It features deep corrections and protracted recoveries. It is a good pair to catch divergence on Forex. However, it is not a suitable asset for scalping, as the spread can reach 3–4 pips.

Market Analysis and Trade Monitoring 

Scalpers have virtually no time for analysis. Therefore, much of their strategy relies on automation and experience. They constantly monitor their trades. Scalpers often work without stop-loss orders and close trades manually to save time.

Here is an example of the MT4 platform’s One-Click Trading function.

Swing traders have much more time for analysis. There is no need to constantly monitor the chart. Small drawdowns often prompt traders to reverse their trades, a common psychological mistake. It is better to safeguard the trade by setting a stop-loss and a take-profit, and then leaving the trade alone for a few hours.

Number of Trades and Profit-Taking

A scalper opens numerous short-term trades. For example, each 5-minute trade can bring 3–5 points of profit. With a 70% success rate per hour, a scalper can earn about 35–40 points. However, this is rather an optimistic scenario, because you need to take into account the spread, unprofitable trades, and the time spent searching for signals.

On the M5 time frame, the first candlestick opened at 1.08036, and the second candlestick closed at 1.07923. The difference in 4-digit quotes is 11.6 points. We round it up to 10 points, assuming a small margin of error. For a position in the EURUSD pair with a volume of 0.01 lots, 1 point costs $0.10. In 10 minutes, the profit was $1. If you spend 10 minutes searching for signals and breakouts, 4 out of 5 trades per hour are winning, the profit will be approximately $3 per hour.

A swing trader opens one position on a correction with the goal of getting at least 20–30 pips of profit from one trade in a few hours or a couple of days. On the one hand, a swing trader can open several similar trades on different assets. On the other hand, it may take more than a day to find a signal, and the loss on a single trade for a swing trader can be much greater than for a scalper.

On the H1 time frame, we can see an emerging trend. Wait for a correction to start during the next candlestick (1), and after a rebound from the trend line, open a short position. Close it (2) when two green candlesticks appear in a row, similar to an Engulfing pattern. Open at 1.09032, and close at 1.08335. The profit is approximately 69.7 points in 10 hours. Taking into account rounding, the trade brought about $6.

With this calculation, the scalping strategy looks more profitable. However, finding four profitable trades per hour that would bring 10 points is difficult if not impossible. Meanwhile, corrections in the trend occur frequently. Therefore, even with fewer trades, swing trading strategies allow you to get a higher net profit.

Psychological Load

1. Scalping requires constant sitting in front of a computer. At the very least, your eyes get tired and you lose alertness. That’s why scalpers often take short breaks. A rule of thumb is to spend one hour near the monitor, followed by a 15-minute break. Scalpers also take breaks if they have had several consecutive losing or winning trades to curb their excitement and euphoria, or disappointment and anxiety.

2. A swing trader can open several trades and leave them unattended for several hours. In theory, the load is less. In practice, several psychological pitfalls arise. First, curiosity—the desire to check the chart almost every minute. Second, the longer a trader thinks and the more indicators they use, the more doubts they have: “Are the signals really working? Am I using technical indicators correctly?” Eventually, it turns out that the first decision that came to mind was the right one.

Pros and Cons of Swing Trading

The main advantage of swing trading over scalping is less trading volume, less time spent, fewer trades, and lower commission costs. In addition, swing traders do not need to constantly monitor their positions, as they can be executed over several days or weeks. Swing traders opt to trade on higher time frames, where it takes 30–60 minutes for a candlestick to form. During this time, you can set up trading indicators, check the news, and consult with others.

Pros and Cons of Scalping

A scalper does not need to wait for a new trend to emerge—they can earn money here and now. This can affect overall profitability. While a swing trader waits for one lucky moment to earn 20 points on a correction, a scalper will open 10 trades and earn three points on each.

Swing Trading vs Scalping: Which Strategy Is Right For You? 

Scalping vs. swing trading: which to choose? Try answering the following questions:

• Can you make decisions instantly? Can you quickly draw key levels and recognize patterns?

• Do you have a ready-made table or calculator at hand to help you calculate the position size and risk level, taking into account the stop-loss distance? Can you do all this in a few seconds?

• Do you know what price noise is? Can you recognize Smart Money traps?

• Are you ready to open/close trades without emotions, excitement, and FOMO? Are you comfortable with losses?

• Do you have several proven trading strategies? Have you tested their effectiveness on the quote history?

If you answered yes to these questions, scalping is right for you.

• Can you recognize trends? Can you identify their beginning and distinguish the start of a new trend from a correction? Do you know at least 10 reversal patterns, and can you quickly identify them?

• Are you immune to the “I’ll just take a quick look at the chart” syndrome? Can you freely leave a trade in the market for several hours without feeling nervous and without checking your computer every minute?

• Do you know how to correctly calculate a stop-loss level, and do you know the rules for closing trades partially?

If you answered yes, swing trading is a suitable option for you.

Conclusion

Swing traders and scalpers are similar. Both tactics involve earning money from price fluctuations. However, scalpers gain from short-term fluctuations at any point in the market, while swing traders profit from medium- and long-term movements.

Scalping is a more technically complex technique that puts greater strain on your eyes and nervous system. Swing trading does not require quick decision-making, making it a more suitable option for beginners.

The profitability of both strategies depends on experience, risk management, and inherent intuition. It is impossible to state which one is more profitable. However, there is no restriction on combining both tactics. While a medium-term trade is open on a trend correction, it is possible to work with small time frames.

Swing traders can open long positions during an uptrend and short positions when a downtrend begins. For scalpers, a trend is not essential.

Test each strategy on a demo account to find out which one is best for you. Another option is to combine medium- and short-term trading. Understanding your risk tolerance, trading pace, free time, and schedule flexibility can help you implement these strategies safely.