Before we find out what is stock trading, we will first get cleared with what is trading.

So, in daily life trading is buying and selling of items or exchanging one item for another. Likewise, trading in the financial market is buying and selling of various kinds of financial instruments like stocks, commodities, currency, etc.

So, this was trading, let's get to know what stock trading is.

Stock Trading is buying or selling of stocks i.e. shares of a company. If you buy a share of a particular company, you own the company in that purchase amount (i.e. a small piece of the company). In other words, we can say that stock trading is an exchange of ownership of a piece of company among people on a regular basis.

Stock traders buy a share at a particular price and then sell it at a different price (normally and hopefully higher price). And when sells it at a higher price, he makes a profit from it. So, stock traders buy and sell shares to capitalize on day-to-day price fluctuations. This fluctuation of prices of shares happens because of the demand and supply factors involved.

Types of Stock Trading

Stock Trading can be performed through different stock trading strategies. Here, are some of the prevalent types of stock trading operational in the Indian stock markets:

• Intraday Trading -

Also known as day trading. Traders in intraday trading buys and sells the stock on the same day resulting in no change of ownership of the shares

• Swing Trading -

In swing trading, the traders attempt to make profits by holding the stocks for either a period of a few days or a few months. Swing trading involves taking risk with weekend price or overnight price change.

• Positional Trading -

In position trading, a trader holds an investment i.e. the shares for a long-term expecting to sell it after an increase in price over a long period of time. Positional traders are not active traders of the market unlike Intraday traders and they place very few orders in a market.

• Technical Trading -

Technical trading involves looking at past performance of the company on the stock chart, i.e. its price pattern and analyze what will happen next. Technical traders do not give attention to the company's performance as a whole - i.e. its debt, revenue, expenses, etc.

• Fundamental Trading

In fundamental trading, traders focus on company specific information and various events that transcend the company that affects its share’s demand and supply.

• Momentum Trading

In the event of trading on momentum, a trader takes advantage of the momentum of a stock, i.e. a significant increase or decrease in the value of stocks.

Last Words -

~ Collect as much knowledge as possible from certified sources before investing money.

~ Don’t get greedy or disappointed in the first few months, experience gives a lot of lessons and that lessons matter the most.

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