Different Types of Stock Trading in India

Stock market provides a wealth of lucrative chances for all types of traders, attracting millions of trading enthusiasts to generate additional income, with different types of stock trading. Beginner traders quite often need to decide the best type of trading for them based on their financial goals before entering into trading. In this article, you will learn about different types of stock trading and understand what is suitable according to your risk perceptions and financial objectives.

Different Types of Stock Trading in India

1. Intraday Trading
   
   

Intraday trading is a common type of stock market trading type, also known as Day Trading that implies buying and selling company stocks on the same day. Day traders need to have complete understanding of technical concept and analysis tools like charts, candlesticks and indicators to gain profit from short-term price swings in stocks.

2. Positional Trading
   
   

Positional trading is a long-term trading type in which traders hold stocks for months or years. Suitable for traders looking for long term gains while dismissing short-term volatility, this technique requires complete understanding of financial markets, company’s fundamentals and development potential, and broader market trends.

3. Swing Trading
   
   

Swing trading involves holding stocks for few days to weeks while capitalizing on short to medium term price fluctuations. Traders need to have technical as well as fundamental analysis knowledge to select stocks with the potential for price fluctuations to gain profit from these movements. Suitable for traders preferring relaxed approach to stock trading.

4. Long-Term Trading
   
   

Long term trading is one of the safest trading strategies suitable for traders who want to buy and hold the stocks for years to gain maximum profit. Traders need to analyze the stock’s growth potential by reviewing its fundamentals, development, news, industry knowledge, and latest economic updates.

5. Scalping
   
   

Scalping is a challenging day trading strategy that implies purchasing and selling company stocks within minutes while making profit from small price fluctuations. Scalping traders purchase quick trades in large amount in a day to obtain small profits. Scalping can be done manually or by using automated systems and need a high amount of experience and knowledge to trade.

6. Momentum Trading
   
   

In Momentum trading, traders buy or sell stocks by predicting a stock’s price movement to identify the right entry or exit positions. It involves buying rising stocks and selling falling stocks. Momentum traders utilize various technical indicators to identify price and volume patterns to choose the potential stocks with upward or downward momentum trajectory and make trade with the possibility of profiting from future price fluctuations.

7. Delivery Trading
   
   

Delivery trading is similar to long term trading that involves buying shares with the purpose of holding them for months or years. It implies the physical transfer of shares of the company from the seller’s to the buyer’s demat account.

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