There Are Different Types Of Trading In Stock Market. We Can Trade By Which Ever Trading Style Suits Best For Us.
For Example, If You Want To Be A Full-Time Trader, Want To Trade Daily, Can Spend Full Time For Trading, And Want To Make Money Quickly Then Intraday Trading Or Scalping Are Best For You. Or If You Have Any Other Job, Can Only Spend Few Hours Weekly For Stock market And Want To Earn Passive Money From Stock Market Then You Can Choose Short Term Or Positional Trading.
In These Articles You Are Going To Learn About Different Types Of Trading In Stock Market.
List Of Content :
- Types Of Trading In Stock Market
Types Of Trading In Stock Market
Intraday Trading [Types Of Trading In Stock Market ]
In Intraday The Trader Buys And Sells The Shares Within the Same Day. This Is Also Called As Day Trading.
Intraday Trading Is Very Risky, It Is Not For Beginners, You Need To Be Very Good At Reading Charts And Technical Analysis To Be Successful In Intraday Trading. And You Have To Get Good At Spotting Intraday Opportunities. Very Fast Decision Making Is Required In Intraday Trading.
The Very Most Important Thing Is To Control Your Emotions.
TIME FRAME: Buying And Selling Within The Same Day.
Swing Trading [Types Of Trading In Stock Market ]
A Swing Trader Holds A Position For A Few Days Or Up To A Week. It Is Mostly Used To Capitalize On The Very Short Term Stock Trends And Patterns. There Are a Lot Of Swing Trading Strategies But Most Of Them Are Based On Momentum Or Event-Based.
For Swing Trading You will Need To Stay On Top Of The News Flow And Be Very Much In Tune With The Market.
TIME FRAME: Up To 7 Days.
Short Term Trading [Types Of Trading In Stock Market ]
Short Term Trading Means It Goes Higher Than Swing Trading, A Short Term Trader Holds The Position For Few Weeks Or At Most up To 3 Months.
TIME FRAME: Few Weeks To At Most 3 Months.
Positional Trading [ Types Of Trading In stock Market ]
The Duration Of Positional Trading Is Closer To Long-Term Investment, In Investment The Investor Enters Only For A Long Position.
But In Positional Trading, Trader Enters For Both Short And Long Positions, Means Whenever The Trader Is Comfortable With His Profits, He Will Exit the Position. It May Be Few Months Or Up To a Year.
Positional Traders Rely On Industry And Company Information To Form A Decision On Their Asset, They Pick Stock That They Believe Will Grow Significantly Over A Period.
Short Selling [ Types Of Trading In Stock Market ]
Most Of The People Get Confused about What Short Selling Is. But Short Selling Is Not That Much Complicated.
In Short Selling The Trader Things The share Price Will Go Down So The Trader First Sells the Shares At Higher Price And Buys It At Lower Price. I Know you Might be Confused That How Can We Sell Shares That We Don’t Have.
We Can Sell Shares Even If We Don’t Have The Shares, The Broker Will Give The Shares And We Need To Give Them Back Within The Day. Means We Need To Square Off The Positions Within the Same Day.
Let Us Understand In Detail with A simple Example, With This All Your Doubts Will Get Cleared.
Example For Short Selling
For Example, A Share Priced At 100Rs. We Anticipate That Share Price Will Go Down.
So We Sell 10 Shares At 100Rs.
Image In Our Account We Have Amount Of 1500Rs.
We Sold 10 Shares At 100Rs Means Total =1000Rs.
Already We Have 1500Rs In Account And Now We sold 10 shares Worth Of 1000Rs, So We Get 1000Rs By Selling Those Shares, The Shares Are Given By Our Broker, We Need To Give Them Back within the Same Day. So Now The Total Amount We Have Is 2500rs ( 1500Rs + 1000Rs ).
As We Anticipated The Stock Came Down To 50Rs, Now We Buy the 10 Shares To Give It Back To Broker.
Now The Share Price Is 50Rs. So For 10 Shares, the Total Is Only 500Rs, We Buy And Give The 10 Shares Back To the Broker. Now Our Total Amount Becomes 2000. Because When We Bought The 10 Shares At 50Rs It Costs 500Rs. So The Amount Will Be Deducted From Our Account ( 2500Rs ).
Now We Left With 2000Rs, So 500Rs Of Profit.
Sometimes It May Go the Opposite Way Of What We Thought, So We Need To Maintain Some Margin.
BTST [ Types Of Trading In Stock Market ]
BTST Means Buy Today Sell Tomorrow, Which Means People buy Shares Today In Anticipation That Price Will Go Up The Next Day.
For BTST The Traders Mostly Buy The Shares During The Last Hour Of The Market And the Next Day Sell Their Shares Within The First One Hour.
An Advantage Of BTST Is You Don’t Have To Pay Any DP( Depository Participant ) Chargers, Because It Takes T+2 Days For The Stocks To Get Delivered To your Demat Account, But In The Case Of BTST We Are Selling The Stock the Very Next Day So There Is No DP Charges For BTST.
Scalping [ Types Of Trading In stock Market ]
Technically It Is A Kind Of An Intraday Trade, But It is Very Unique In Its Approach. What Separates A Scalper From A Regular Intraday Trader Is That He Stays In the Position For A Very Short Amount Of Time. It Can Be For A Few Seconds To Minutes.
The Idea Is To Get In And Out Of A Trade As Quickly As Possible.
The Scalper Is Not Expecting To Make 5% Or 10% In A Trade. Most Of the Scalpers Are Happy with even 0.5% Or 1% Of The Gains. Because They Take Much Bigger Positions Than Regular Trades.
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