STOCK MARKET: What is Stock Market Trading, Stock Market Trading, Types of Stock Trading

WHAT IS STOCK MARKET TRADING? (Types of stock trading)

Friends, often we get to hear the word Trading in the stock market, today we will discuss in this regard "what is stock trading? What is stock market trading? How many types of trading?"

STOCK MARKET TRADING

Trading means buying and selling any goods or services with the intention of making profit.

The meaning of Trading is Business. When we buy any goods or services with the intention that after some time we will earn profit by selling those goods and services, then this work is called “TRADING”. All the business we see happening around us – whether ration or vegetable shop or another shop, all shopkeepers buy goods or services for this purpose so that they can earn profit by selling them.

TRADING IN THE STOCK MARKET

We have seen that TRADING means buying and selling goods or services for the purpose of making a profit. Similarly, when we buy any stock or share in the stock market, then our main objective is to earn profit by selling it when the price of that share or stock increases.

And in this way more than 99% of the people participating in the stock market, when they buy and sell any shares or stocks, their action is called "STOCK MARKET TRADING".

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How many types of trading are there in the stock market?

The word “TRADING” seems to be hastier and RISK than “INVESTMENT”, and this is also true to a large extent because the person doing the trading is always waiting for the opportunity and as soon as he sees the right opportunity, he sells his deal. earns tax benefits.

Seen in this way, TRADING is a SHORT TERM ACTIVITY and there are some main types of TRADING –

1. INTRADAY TRADING (Day trading)

Such trades are completed within a day. That is, the act of buying a SHARE or STOCK on the same day and selling it on the same day is called intraday trading, like buying a stock after the MARKET opens at 9:15 in the morning and you selling it before the MARKET closes at 3.30 pm on the same day. It is often seen that an intraday trader does 5-6 trades in a day. The time to hold stock in this type of trading is in a few hours.

Note: For this type of trading, BROKER companies give you a margin of ten to twenty times more than the amount available with you that you earn profit by taking them there for the whole day and by evening on the same day you sell their money to them. return them.

2. SCALPER TRADING

Such trades are completed within a few minutes. That is, if it is sold within a few minutes to buy SHARE or STOCK, then it is called SCALPER TRADING. For example, buying a stock after the MARKET opens at 9:15 am, and selling it within 1,2, or 5-10 minutes of buying to make a small but quick profit. It is often seen that AMOUNT is very high in this type of trading. For example, if you invest 10 lakh rupees and take 10000 shares of 100 rupees in it, then if the share increases by 20 paise above 100 rupees, then 10000 X 0.2 i.e. about 2000 rupees becomes a profit. And if a share of Rs 100 becomes Rs 101, then at the rate of Re 1 per share, you can make a profit of up to Rs 10000. People do this kind of trading to earn quick profit with small profit margins.

Note: For this type of trading, BROKER companies give you a margin of ten to twenty times more than the amount available to you. So you earn profit by taking them there for the whole day and by the evening of the same day you sell them their money and return them to them.

3. SWING TRADING

Swing Trading: Such trades are completed within a few days, weeks, or months. That is, after SHARE or STOCK, keep it with you for a few days, weeks or even a few months and wait for its true value to increase. For example, selling the shares purchased in JANUARY 2021 by February or April May, this type of stock buying is called buying on SHARE DELIVERY.

In this type of trade, the trader trades with the expectation of increasing the price of his shares by more than 5 or 10 percent per day. The thing to note is that in this type of trade, the entire money is invested by the trader, in this the company does not give any kind of MARGIN MONEY.

4. Position trading (Long Term Trading )

Holding shares for a long period of time is called positional trading. In position trading, traders focus on long-term price movement, in search of the maximum potential profit and negligible loss from major changes in price. This is one of the best ways of trading in which trader invests for the long term and earns manifold returns.

Trading in position trading usually takes place over a period of weeks, months, or years. Since there are many small fluctuations over a period of several years, it does not have much effect on the position trader.

Position traders are not concerned with small price fluctuations or slippages, so they do not need to monitor their positions on a daily basis like other trading types. When they make investment ideas for the long term, keep in mind that to choose the best company you should know about the company's fundamentals, future strategy, company's competitive advantage, debt, and many more things.