Yes - generally positions opened and closed within the same day is refered to as day trading, holding from days to weeks is refered to as swing trading, and longer term trading is know as position trading or trend following or simply investing where you would buy and hold sometimes for many years. The style of day trading that the trader you know does could be refered to as scalping. This is when a position is held for a very short time with the aim of catching lots of small profits. Level 2 (I've never used it so my description will be poor!) is software that shows you the 'order book'. Where everyones orders are placed and where all the pending orders are. It also shows you advanced volume information which I believe scalpers interperet to make their decision. This is generally regarded as the most difficult and demanding of all trading styles.
So yes if you intend on holding from days to weeks, that would be swing trading and no your guy isn't swing trading, he's day trading and possibly scalping. Before you start trading you need a plan. You can't just buy and sell on a whim. You'll never make any money doing that. You need to develop an edge. This is buy far the most difficult aspect of trading - developing and maintaining an edge. This is when you can consistently apply a system that is consistently profitable.
Now when developing your system/strategy/methodology or whatever you want to call it. You have to first decide whether you will use technical analysis, fundamental analysis, or a combination of the two. Technical analysis is the study of charts using concepts such as - support and resistance, candlestick patterns, trendlines, indicators (their usefulness is highly debated!), etc. Fundamental analysis on the other hand is the study of... well... the fundamentals! For example, if one is trading stocks they would look at debt levels, PE ratios, profits, assets, capital, director dealing etc.
Scalpers will pretty much only look at technical analysis whereas longer term traders and investors will probably look more at the fundamentals. Most technical analysts would say that all the fundamentals are already priced into a instrument and I'd tend to agree. So I'd advise you to learn about technical analysis/charting for swing trading. So yes I'd stay studying charts is essential for you. Being consistently profitable from using indicators and news speculation will be very difficult. There is a thread on the 'general trading chat' page about trading the news and there are many about trading with indicators. Countless arguments for and against. The main problem with indicators is that they are lagging, they use past data to give a signal. Many people use these signals or combinations of signals to predict future price movements. Unfortunately its not as easy as making a trade based on a signal from an indicator. If it was, everyone would be doing it. However, I know some people use many combinations of signals to make trades sucessfully.
DMA is direct market access. It basically refers to buying or selling a particular instrument (forex, stocks, indicies, commodities etc.). Whereas spreadbetting is placing a bet on the instrument to move up or down. Same principal really but different advantages and disadvantages to both. With DMA you have to pay commision, with spreadbetting you have a bigger spread (difference between buy and sell prices). DMA you have to pay tax on profits, spreadbetting you don't as it is classed as gambling. Its classed as gambling because you can vary your stake. Check out Interactive Brokers for DMA or IG Index or futuresbetting for spreadbetting.
I'd say if you want to learn how to trade you have to be prepared for a lot of hard work. Unfortunately its not as easy as it appears. The 2 most important things I feel you should learn about are 'Support and Resistance' and 'Money Management'. Also be carefull what you read on this website. There is a lot of good stuff, but there is more bullsh1t. Its a good laugh though and some great guys and girls around. Get a few books and learn the basics.
All the best,
Sam.