In the stock market, 80 percent of the people know what is trading in the stock market? And many people also do trading but they mostly lose in trading, the biggest reason for the loss is that they choose such a trading style which is not suitable for their personality.
If you want to earn good money by trading then you have to choose the trading style according to your personality and today in this article I will tell you in full detail how many types of trading are there.
What are the Types of Trading in the Share Market?
There are many types of trading in the stock market, but trading is divided into four parts scalping trading, intraday trading, swing trading, and positional trading depending on the time frame.
What is Scalping Trading?
The time frame for doing scalping trading is very short. Scalping trading is done from a few seconds to a few minutes and only expert traders can make good profits in this trading. If you are new in the field of trading then do not do scalping trading.
What is Intraday Trading?
Intraday trading is also called day trading. The time frame of this trading lasts from the market opening to closing. When the market opens at 9:15, we can buy and sell a lot of shares but until the market closes at 3.30 minutes. The risk in this trading is low.
What is Swing Trading?
In swing trading, people make a profit by buying and selling shares within 1 week to 2 weeks. There is a fear of less loss in swing trading than in intraday trading. If you are new to the field of trading and you have not done the technical analysis properly. Even you can trade in it by taking a little risk.
What is Positional Trading?
This trading style is the least risky. In this people trade between 1 week to 1 year, but in this trading, the shares of such a company are chosen, which has strong Fundamental. In this, the risk is the least but before trading in it, we have to do a Fundamental analysis of the company.
Other Types of Trading
We told above that according to how long we trade. On that basis, trading is divided into 4 parts, but trading is also done in other ways in the market. like -
- News Trading
- Algo Trading
- Momentum Trading
- BTST Trading
- STBT Trading
- Arbitrage Trading
You must have also heard the name of delivery trading and margin trading in the stock market. We also call delivery trading as positional trading and margin trading can be considered as intraday or day trading because we get margin in intraday trading.
Example - For example, suppose you want to do intraday trading and you have less money, then you can do intraday trading even with margin, this is called margin trading. We get a margin of 5 times of the money we invest in intraday trading.
News trading
Trading by taking advantage of the fluctuations in share prices due to news in the stock market is called news trading.
Algo Trading
Algo trading is also known as Algorithmic trading. It is a special type of trading in which the computer program trades on your orders, at what price to buy the stock and at what price to sell. All this, algo trading software does it by itself. Just, in the beginning, we have to give instructions. When to sell and when to buy.
Momentum Trading
When there is a breakout in a stock, trading on that breakout is called momentum trading. There are many types of breakouts such as -
- Chat pattern Breakout
- Price Breakout
- Volume Breakout
- Candlestick pattern Breakout
BTST and STBT Trading
BTST and STBT mean Buy Today Sell Tomorrow and Sell Today Buy Tomorrow. In this, the stock is bought or sold in the last candle of today's day and the next day the market opens more or less than the close price of today's candle. Taking advantage is called BTST and STBT trading.
Arbitrage Trading
There are many companies that are listed in more than one stock exchange and sometimes there is a lot of difference in the share prices of those companies on different stock exchanges, taking advantage of this trading is called arbitrage trading.
Example - For example, suppose there is a share of ABC company whose price is Rs 100 in BSE and Rs 108 in NSE, then you can buy that share from BSE and sell it on NSE.
Which Trading Style is Best?
No trading method is either too good or too bad, but depending on your market expectations, market knowledge, and risk appetite, that trading style can be right or wrong for you.
To choose a good trading style, you need to analyze your emotions, technical analysis knowledge, and trading psychology to know which trading style is best for you.
At the beginning of trading, you must try all the trading styles and after that analyze which trading style your fear of success is the best, then that trading style which you have full confidence that you can do it correctly.
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