Types of Trading and Investments
Basically trading and investing are two different methods of earning money in share market.
Types of Trading
Trading is done on stock price for a day or for couple of days.
Trader is not worried about company performance; he is only worried to book profits whenever the share price rises.
Basically there are two types of trading methods
1. Day trading and
2. Swing trading.
1. Day trading
Buying and selling of shares on daily basis is called day trading.
Day trader don’t carry stocks to next day, he square off the positions (shares) on same day.
Mainly there are two types of day traders.
i. Scalp trading
ii. Momentum trading
i) Scalp Trading
A scalp trader buys and sells shares at very low profits (margins) and does multiple trades on daily basis.
ii) Momentum Trading
A momentum trader identifies the trend and buys shares at bottom and sells at the high of the trend.
He may do one or two trades or at the most three trades in a day.
He may not do as multiple trades as scalp trader on daily basis.
2. Swing Trader
A swing trader is just like a day trader but swing trade may hold the shares (positions) for couple of days like 4 to 5 days, while day trader doesn’t hold shares even for next day.
Swing trader basically trades based on news, breakout and breakdown in technical charts, based on volume surge, based on up and down trade etc.
Note - There is no any hard and fast rule that trader follows any particular method of trader methods as mentioned above.
Basically trading and investing are two different methods of earning money in share market.
Types of Trading
Trading is done on stock price for a day or for couple of days.
Trader is not worried about company performance; he is only worried to book profits whenever the share price rises.
Basically there are two types of trading methods
1. Day trading and
2. Swing trading.
1. Day trading
Buying and selling of shares on daily basis is called day trading.
Day trader don’t carry stocks to next day, he square off the positions (shares) on same day.
Mainly there are two types of day traders.
i. Scalp trading
ii. Momentum trading
i) Scalp Trading
A scalp trader buys and sells shares at very low profits (margins) and does multiple trades on daily basis.
ii) Momentum Trading
A momentum trader identifies the trend and buys shares at bottom and sells at the high of the trend.
He may do one or two trades or at the most three trades in a day.
He may not do as multiple trades as scalp trader on daily basis.
2. Swing Trader
A swing trader is just like a day trader but swing trade may hold the shares (positions) for couple of days like 4 to 5 days, while day trader doesn’t hold shares even for next day.
Swing trader basically trades based on news, breakout and breakdown in technical charts, based on volume surge, based on up and down trade etc.
Note - There is no any hard and fast rule that trader follows any particular method of trader methods as mentioned above.
