Share Market

Trading can be done in several forms. To seek profit from short term trades a number of trading methods can be followed.

Day trading: is where stocks are sold and bought throughout the day with a hope that it would shoot up while its value keeps on fluctuating during the day. A day trader can hold stock during the day as he has to give away all of it before the closing of each day. He is immune to any risk at night as all his stock is given away with during the day. Day trading is further divided into Scalpers and Momentum traders. Scalper is when the trader sells or buys in large volumes to earn a small per share profit. Whereas, momentum traders identifies and trades stocks to buy at bottom and sell at top.

Swing trading: have a slightly longer time horizon than day traders for holding a position in a stock. It also has the capability of providing higher returns than day trading. However, the swing traders assumed overnight risk.

Position trading: is similar to swing trading but with a longer time horizon. These traders identify stocks where the technical trends suggest a large movement in price.

Online trading: can include long term investors, as well as day, swing and position traders. They use either an Internet connection or a direct access online trading platform to access and execute trades with Web based brokers.

There are certain golden rules to be followed while trading. You must divide your capital into few equal parts as it is foolish to risk your capital on one trade. Trading is suitable for active and highly volume stocks or futures. It’s important to stick to management rules and not to indulge in over-trading. You must never get into market just because waiting makes you anxious. It works the other way round too, that is, never get out of the market because you have lost your patience.

Trading is tough job and thus it should be left to the market to decide. Also a losing trade must be avoided to make small profits and big losses. Traders must always trade with genuine risk capital and should trade within their capabilities, financial and otherwise too. You tend to get greedy in matters of money, but trading is safe when it’s kept free of greed or fear. For traders having self conviction is important.