Introduction To Trading in the Stock Market:
Trading means buying and selling financial assets such as Stocks. A stock market or Share market is where people buy and sell stocks.
Types of Trades in the Stock Market:
- Intraday trading.
- Scalping.
- Swing trading.
- Position trading.
- Momentum trading.
- Technical trading.
- Fundamental trading.
- Delivery trading.
- Intraday trading:
Intraday trading means buying and selling financial stocks within the same day of trading.
- Scalping:
Scalping means buying or selling several shares at bid or ask price and quickly selling them for higher or lower cents for a profit.
- Swing trading:
Swing trading means holding the trade for one or more days.
- Position trading:
Position trading means buying and selling financial assets for a week or month.
- Momentum trading:
Momentum trading involves buying or selling a trade that is moving in one direction and exiting when the movement shows signs of reversal.
- Technical trading:
Technical trading is a historical pattern in which traders predict what might happen to stocks in the future.
- Fundamental trading:
Fundamental trading is a method in which a trader focuses on company events to select which stock to buy. It is associated with long-term trading instead of short-term trading.
- Delivery trading:
Delivery trading means buying the trades with the intention of holding them for a longer period of time like more than one day.
BASICS OF STOCK MARKET
*There are many words that we can use to describe stocks, such as share,
Equity, Cash Market, Ownership, and Stock Partnership.
*A stock is a kind of asset that is dematerialized (used to remove paperwork) and that is why we now have a DEMAT ACCOUNT
*Some common terminologies of the stock market:
- IPO – Initial Public Offering
- NSE – National Stock Exchange. We suggest/guide our students to trade in the National Stock Exchange (NSE) as the volume (quantity) of stocks is more here.
- BSE – Bombay Stock Exchange. We will not be trading or investing through/in this stock exchange.
*Fundamental Analysis- Before making any trade, we must do a thorough analysis of a company’s/stock’s fundamental aspects, especially when we want to invest for a longer period.
*The movement in the stock market is mostly due to news and updates about the company’s stocks
However, We will not trade or invest based on the news because having that
the approach can be proven risky and we may lose our hard-earned money.
*Technical Analysis -This is a type of analysis in which we analyze charts of stocks and study the pattern of how that stock has performed in the past. We implement this method when we trade and do not invest for a longer period.
*Index Every country has its Index/list of top best-performing companies. In India, Nifty50 is an index that comprises the top 50 best-performing companies in India. This list is not certain and it varies with the time.
*Bullish market – When the Index price is rising
*Bearish market -When index price is falling
*Sideways Market- Price moving in a consistent range.
* Types of trading methods:
○ Intraday trading – this type of trade can only be executed between 9:15 am to 3:15 pm on that particular day.
○ Swing Trading– this type of trade can be executed for more than 1 day to 3 months.
○ Investing – in this type of trade, one can buy a stock and hold that stock forever.
*Types of participants in the stock market:
◦ Retail Investors (general public/citizens)
◦ High Net Worth Investor H.N.I
◦ Institutional Investor – Fl(Foreign investors)& DI(Domestic investors)
*Short Selling:
This is also a method of trading in which one sells a stock at a higher price & then buys at a lower price to book a profit.
I hope the above information is helpful for you. the above information is only for educational purposes. for more relatable blogs follow us on growthofindia.com