Based on the duration of stock holding following are the stock trading styles:
Particularly in this type of trading both buying and selling of any financial instrument is done within the same day. All the tradings are closed before the market is closed for the day. Traders who do trading on the same day are known as active traders or day traders. This type of trading is not advisable for the beginners. Arbitrage, market making, momentum day trading, pattern trading, scalping, reading, reading and news playing these are some methods of day trading.
Short Term Trading:
Trading which lasts for more than one day or few weeks is considered as short-term trading. In short-term trading, a stock is purchased and it will hold in position from one day to few weeks. Short term trading sometimes becomes very risky and unpredictable because of its volatile nature of the stock market at various times.
Medium Term Trading:
Medium term traders hold the positions for a few days and take the advantage of fundamental factors and Technical set up. Medium term trading involves looking at multiple time frames in which technical indicators are used such as moving averages.
Long -Term Trading:
In long-term trading, the stocks are held for many months or sometimes for many years. Investment decisions and long-term trading are made by fundamental analysis of the stock. Dividend, bonuses, and profit from the growth of the company attract this type of stock trading.
The types of stock trading may also be classified in relation to a trend as Trend following, contrarian investing, and range trading etc.
To trade in the stock market is not an easy task. For a beginner, it is tough to understand basics of trading. IF one is not able to trade properly in the stock market then he/she can take help from technical advisors or from any other advisory firms like TradeNexa. These firms have a team of the experienced technical analysts who will guide you how to invest, where to invest. They provide Stock Option Tips, Option Trading Tips etc which will help you to decide whether you have to buy a stock how or to sell a stock.
In order to earn a maximum profit at minimum investment, you have to take care of your decision as your decisions will decide whether you will become a successful trader or not. So do not take hasty decisions take your time and first try to understand the whole process of stock market and then start trading.