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Type of trading in stock market

Type of trading in stock market

History of Stock market

Nowadays Stock market in India is growing rapidly. And also Type of trading in stock market in India is also growing.This improvement in the stock market can be helpful for growth in the Indian economy. Trade has existed for long as human civilization., the agricultural revolution.

Stock Market came into existence with the formation of joint stock companies in Europe. Stock Market started mushrooming in various European Cities. The first joint stock company came to trade its shares was the Dutch East India Company it is released their shares through Amsterdam Stock Exchange.

The first and oldest exchange for online trading in India and Asia was the Bombay Stock Exchange (BSE) was established in 1875, along with the National Stock Exchange (NSE). these are the 2 major exchanges where you can do trading and investment.

In earlier days for the proof, they will provide share certificate that include name, number of quantities, share name etc., it can be easily manipulated by other people. In 2000 and 2001 physical share certificate (Digital Share Certificate) introduced. After Harshad Mehta scam and due to because of other scams government has introduced SEBI (Securities Exchange Board of India) this established on 12 April 1988 as an executive body and was given statutory powers on 30 January 1992 through the SEBI Act.

Type of trading in stock market-Meaning of Trading

Trading means exchanging goods and services. In stock trading investors Buy and Sell stocks of a particular company with the help of BSE and NSE. Here there are many types in trading such as Intraday Trading, Scalping, Swing, Position, Momentum trading, Technical Trading, Fundamental Trading and Delivery Trading.

8 Types of Trading i.

Intraday Trading is also known as day trading, it involves buying and selling of stocks within the day. If you are not square your shares within the day means before 3.20pm your broker will square it of at 3.20pm. Here the persons who are doing Intraday Trading you can take the advantage of short-term trading.

The person who is doing intraday trader should know about the technical analysis, quick decision maker and high level of discipline is required in this. Trader uses the candlestick pattern, charts, various indicators and support and resistance etc., Here you can use the timeframes as per your requirement. There is various timeframe is there in trading view chart that is 5 minutes,10 minutes, 15 minutes,1 hour ,1 month etc.,

Scalping is also like Intraday Trading here you can take the small profits or small loss then exit from the trade. Trading means that it is not like whenever you take the trade it will be profitable, sometimes you have to bear the huge losses also. Scalper should be aware of market news and quarterly result time in that time there is a high volatility in the market.

Sometimes whenever we take the trade and not able to book the losses as greedy so it will create a huge loss for us. Here you should be aware of risk reward ratio. Risk reward ratio means it is a way of assessing potential returns that you stand to make for every unit of risk. For example, if you risk Rs 100 and expect to make Rs 300, the risk-reward ratio is 1:3.

Swing Trading is quite different from intraday and scalping. It involves holding of stocks for few days or for few weeks. Here the swing trader should take the advantage of short term and medium-term fluctuations in the market. The main aim of the swing trader is to capture the ‘’swings’’. The swing trader should have the capacity to hold the stock for a week without panic.

They use the Technical Analysis chart pattern, candlestick, trendline. Many indicators are there some are Relative Strength index (RSI), Moving average, Stochastic Oscillator, Bolinger Bands, Average Directional Index etc., if you are aware of any of this indicator you can take the advantage. In stock market it is not 100% guaranteed in anything but you can take the trade based on your experience.

Position trading means long term trading. It involves buying and holding the stock for several months or years. positional trader does not worry about the short-term movement rather than use the financial statements, economic data, news, industry analysis etc., In every trading the trader should be having the patience to hold the stocks, discipline, and risk management skills. This helps to become a profitable trader in the future.

Buying and selling the stocks based on the performance. Movement of stock, either upwards or downwards. A trader tries to capitalise on such momentum by identifying the stocks that are either breaking out or will break out.

In case of upward momentum, the trader sells the stocks he/she is holding, thus yielding higher than average returns. In case of downward movement, the trader purchases a considerable volume of stocks to sell when its price increases.

The trader should be studying the technical analysis based on the past price performance and predict the future of the price suing chart pattern, candlestick etc.,

In fundamental analysis rather than the technical the investor should do the research on screener website about company like companies net profit, sales, revenue, fII’s .Buy and sell the stocks based on the performance of financial health, economic factors and make the proper decision.

Delivery trading is the traditional method of buying and selling the securities in financial market. It include physical transfer of ownership of stocks, bonus, another financial instrument from buyer to seller. The trader should hold the stock for more than a year.

What are the 7 steps to creating a trading plan?

Conclusion:

Type of trading in stock market article is an introduction to Indian stock market trading evolution.In stock market there are various types of trading is there. The main intention of the people is to make money in stock market. With discipline, proper knowledge, risk reward ratio you become successful in thus. Before jump into any of the trading types first analyses which type of trader you are then invest small amount of money.

Frequently Asked Questions

Swing trading is best trading here also you have to take the losses but you carry forward that stock until it gives you profit. It is not possible in intraday, scalping the broker has to square off you’re trading before the time zone.

Yes, you can invest. Start with Gold bees, Pharma bees, IT bees. As these are stable and less risk. Do not go for penny stock until you have done good study on that.

Rakesh Radheyshyam Jhunjhunwala was an Indian billionaire investor, Stock trader, and Chartered Accountant. He began investing in 1985 with a capital of Rs 5,000. At the time of his death, he had an estimated net worth of US$ 5.8 billion, making him the 438th richest person in the world. He was often referred to as the “Big Bull of India”, and was widely known for his stock market predictions and bullish outlooks.

Stocks aren’t safe as cash, savings accounts, Fixed deposit or  government debt, but they’re less risky when we compare it into stock   market. Dividend stocks are considered safer, because they pay cash dividend, it helps to limit the volatility in market.

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