Like any other trading, stock trading is the exchange of stocks and finances between two parties be it company or individual.
Types of stock trading –
- Day trading – All the trading done in one day is day trading. The investor or the buyer must sell the stocks the same trading day on which he/she buys it. This trade involves high risks and a deep understanding of the market. This is majorly practiced by experienced traders.
- Scalping – Scalping is similar to day trading with an added feature. In this, small profits are made in a day repeatedly. A trader trades for numerous times a day leading to a range of profits and losses. This type of trade is also highly risky as many a time, the net loss surpasses the end profit. This type of trading needs high awareness by the side of the trader, being ready for the market fluctuations and adversities. This is also referred to as micro trading.
- Swing trading – This type of trade generally extends to duration of two to seven days. Investors aim for a particular profit by analyzing the market. After they find the right chance to gain maximum profits they sell the stocks. This trade required keen observation of patterns for a longer time and for every week. The organization type also depends and varies with each season and market demand.
- Momentum trading – This type of trading involves gauging the momentum of stocks: Upward momentum or downward momentum.
- Upward momentum – Through upward momentum, the trader notices the abrupt increases in the prices of the stocks he/she already holds. These stocks are then sold by the trader to obtain benefit of the situation.
- Downward momentum – In this a trader buys a bulk of shares which are losing their value at the current times. The trader buys them at low price and waits for the price hike to obtain benefits.
Upward momentum always reaps profit, sometimes we make less profit then we could but eventually we earn. But to go to upward momentum, we need to pass downward momentum which holds risks. Downward momentum may be risky as what if the prices of the stocks fall endlessly and never increase. Although, the chances of this case are less but still are.
- Position trading – This is long term stock trading. The trader waits for months after buying the stock to find the proper time according to him to sell. This is the most suitable type for less experienced and freshers in stock trading. The common people who are not fully involved in stock trading may use this type.
You need to find the type suitable for you or mold yourself according to the type. Stocks are the next future. Before investing, you can check more information at https://www.webull.com/quote/rankgainer.