Most stock prop firms offer traders the day trading option. However, it is difficult to find those that offer the swing trading option. Therefore, some swing traders opt to adapt their strategies to fit within day trading rules. In most cases, they ultimately fail. Day trading and swing trading are distinct strategies that require different skill sets. Day traders have to be sharp and ready to react to sudden price changes.
On the other hand, swing traders can take their time. Moreover, day traders have to constantly monitor their charts, which can be tedious for a swing trader. Most traders choose to swing trade due to a lack of time. Consequently, it is important to know which prop firms allow swing trading and which are the best.
SWING TRADING STOCKS
Swing trading involves analyzing and capitalizing on medium-term price movements. Swing traders can hold positions for a few days or weeks, depending on the market conditions. It is more relaxed than day trading. Most traders who choose to swing trade do so because they lack the time to constantly monitor the charts. However, some just prefer this style of trading as it is less involving.
All markets in the world swing instead of moving in a straight line. Therefore, they create higher highs and higher lows when moving and lower highs and lower lows when declining. These patterns create great opportunities for swing traders. Most prefer to wait for pullbacks and anticipate swings in the direction of the prevailing trend. Some popular indicators for swing traders include the Moving Average, the Relative Strength Index, and the Fibonacci Retracement tool. These help traders spot trends and likely reversal points.
WHY PROP FIRMS FOCUS ON DAY TRADING
Over the years, prop firms have focused more on day trading than swing trading for several reasons.
PROFIT POTENTIAL
Day trading, when done well, can offer great returns for both the traders and the prop firm. Day trading focuses on capturing short-term price movements within a single day. Therefore, traders are exposed to more trading opportunities, which can turn into big profits. On the other hand, swing trading takes longer. This can translate to fewer trading opportunities and smaller profits.
RISK MANAGEMENT
Another reason why prop firms prefer day trading is that it makes it easier to manage risk. Most stock prop firms have a maximum daily loss limit that ensures the firm’s capital is protected. They also enforce a maximum loss limit, ensuring solid risk management. However, it is more challenging to limit swing traders who hold positions for several days.
EXPERTISE
Finally, day trading requires more expertise than swing trading. Therefore, prop firms target the best traders. Those who can remain disciplined despite taking many trades in a day. Day trading also requires good emotional control. Monitoring charts constantly means it will be easier for emotions to be triggered. Meanwhile, swing trading is more relaxed, attracting more inexperienced traders.
STOCK PROP FIRMS THAT ALLOW SWING TRADING
Several stock prop firms allow traders to hold trades overnight and over the weekend. Some of the top ones include TradeThePool, FTMO, and FundedNext.
TradeThePool Swing
TradeThePool offers its clients the option to Day trade or Swing trade. Traders have to pay a bit more upfront, and the swing trading account has a smaller profit split of 50/50.
FTMO Swing account
FTMO offers its clients the Swing account option that allows them to hold trades for days or even weeks. This is ideal for swing traders who want to keep their positions for a long time.
Finally, FundedNext has no restrictions on holding trades overnight or over the weekend for any of its clients. Therefore, it creates a level field for all traders.
Join FTMO and get funding with a profit split of up to 90%. Join TradeThePool today and get funding with a profit split of up to 80%. Boost your earnings with minimal risk on your part.
COMPARISON OF SWING PROP FIRMS
| Prop Firm | Max Capital | Cheapest Account | Evaluation steps | Profit Target | Time Limit | Max Drawdown |
| TradeThePool | $200,000 | $110 | 1 step | 6% | Yes and No | 4% |
| FTMO | $200,000 | $102 | 2 steps | 10%, 5% | No | 10% |
| FundedNext | $200,000 | $32 | 1, 2 steps | 10%, 8% | No | 6%, 10% |
Swing traders can get up to $200,000 with all the prop firms above. However, when it comes to the cheapest evaluation, FundedNext is leading. $32 is quite affordable, making it a great option for traders on a budget.
TradeThePool 1-step
Meanwhile, TradeThePool has one evaluation step with a flexible and disciplined account. The flexible account gives you unlimited time to complete the challenge. Meanwhile, the disciplined account has a time limit. The profit target is small at 6%, but the maximum drawdown is smaller at 4%.
FTMO 2-step
On the other hand, FTMO challenges have two steps. The first and the verification. The target for the challenge is 10%, but it drops to 5% for the verification stage. Meanwhile, the maximum drawdown is set at 10%, providing traders with sufficient room for losses.
FundedNext 1,2-step
Finally, FundedNext offers traders both a one-step and a two-step challenge option. The one-step challenge is more expensive and has a bigger profit target. Moreover, it has a smaller maximum drawdown than the two-step challenge.
CONCLUSION
Swing traders look for prop firms that will allow them to hold their positions overnight and over the weekends. However, most prop firms prefer the day trading option. Day trading involves executing numerous trades within a short period. Therefore, there are more opportunities to profit.
Additionally, it is easier to have risk management guidelines for day traders that will protect the firm’s capital. However, more stock prop firms are starting to embrace the swing trading option. Some include FTMO, TradeThePool, and FundedNext. Each has its own advantages and disadvantages.
Join FTMO or TradeThePool today and start working on a challenge with no restrictions on holding overnight and over the weekends. Become a funded swing trader with the top prop firms in the industry.
