Swing Trading vs. Long-Term Investing: Which Works Best in Volatile Markets?

Swing Trading vs. Long-Term Investing: Which Works Best in Volatile Markets?

Investors getting surprised by the stock market going up and down is nothing new. For example, the new purchases in Indian stocks reduced to 7,400 crore rupees in 2025, compared with 1.66 lakh crore rupees in 2024. This led to a reduction in the confidence factor in the market.

At the same time, Indian investors now own around 18% of the total stock market. Although the figure is one of the highest ever, there have been so many variations in sales and purchases.

This leads to the discussion about the better choice between short-term and long-term holdings, especially when the market gets volatile.

Market Volatility and Its Impact on Returns

Market volatility means stock prices getting up and down quickly without any profound reasons to back the fluctuations. For example, COVID-19 brought the Nifty 50 down around 40%, while the same bounced back within a year.

Such frequent changes in market data create doubts and concerns for traders. Volatility affects both swing and long-term traders in different ways.

Swing Trading in Volatile Markets

Swing traders are always on the lookout for the short-term price change in a few-day or week-long time period. Market volatility acts in favor of utilizing low buying and high selling. 

For instance, Tata Motors or Adani Enterprises stocks often show a variation of around 10-15% within a short time. However, any specific event or bad global news can also lead to losses in market volatility.

Long-Term Investing During Volatility

For long-term investors, market volatility is the time to look for the long-term picture. For example, the stock of HDFC dropped sharply during COVID but later recovered strongly within a year. Long-term investors played it safe and gained extra returns along with a complete recovery.

As Warren Buffett recommends, be fearful when others are greedy and vice versa. The strength of long-term investment is to buy good ventures at lower prices and get compounding return benefits with time and patience.

Risk Management and Capital Allocation

Swing traders usually safeguard their capital with a quick exit. On the contrary, the long-term investors make their stock investment diverse in multiple sectors.

 For example, if IT stocks witness a drop, the long-term investors can manage the losses with other sector investments. In simple words, both kinds of traders can plan their own ways to deal with the risks.

Taxes and Costs Are Also Important

Swing or short-term investments usually have to bear around 15% of STCG (short-term capital gains) tax. Along with this, there will be other expenses related to broking and transaction charges. Overall, these three can affect the net profit margin in swing trading.

 On the other hand, long-term investments have slightly better tax benefits. It has a 10% Long-Term Capital Gains (LTCG) tax on profits above 1 lakh rupees.

Stay Calm When The Market Fluctuates

When the market becomes volatile, that is the time to show your emotional strength in making decisions. The swing traders require careful analysis, quicker evaluation, and risk-managed action.

 On the other hand, long-term investment requires patience and calmness for slow compounding with emotional holding throughout the time.

Swing Trading vs Long-Term Investing at a Glance

Performance Outlook in 2025

In 2025, the fluctuations of interest rates, inflation, and global news lead to a high level of uncertainty.

Nifty movements between 21,000 and 23,000 are beneficial for short-term gains with 3-5% gains multiple times. Long-term investors are eyeing expansion in various verticals such as banking, infrastructure, and electric vehicles. 

Conclusion

So, the answer to the question of whether to choose short-term (swing trading) or long-term investment depends on you, actually. If you can manage the risk effectively and want quick gains, swing trading is the right approach. However, if your goals are steady and you can maintain patience, long-term growth will be the right choice.

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This analysis is for informational purposes only.  Please consult a SEBI-registered financial advisor before investing.

– Chandan Pathak
Equity Research Analyst, StockYaari