What is trading?
 |
| what is trading? |
In trading, time is not in your favor. Shorter the trading time, larger are the risks. For example, day trading. What happens? You are required to square off your positions within that day. So you are forced to take your losses. In trading, you tend to over trade. What is ovrr trading? You tend to acquire shares worth more than your amount in the account. Suppose you have 100, 000 in your account. You tend to buy for more value. Loss is also more, because you are leveraged.
In investing, time is in your favor. If you have one lac, you buy for one lac. Risks are always there. Let us assume, it comes down by 10 percent. You continue to hold it. Sometime after 3 months, it goes up above your purchase price. This results in profit.
In investing, time is in your favor. If you have one lac, you buy for one lac. Risks are always there. Let us assume, it comes down by 10 percent. You continue to hold it. Sometime after 3 months, it goes up above your purchase price. This results in profit.
Trading on equity is buying and selling of stocks to make a profit of the stock markets. Traders take a short term view/opinion/timeframe in which they buy stocks, make a profit and sell the stocks.
One shold beware that while trading, you must have strict stop loss( fail safe) price and a target price in mind for the stock. Else it becomes too risky.
Unlike investors, traders are looking for short term gains based on market movement. They generally trade in the low margin high volume category.
Traders normally tend to participate in intraday trades, where the buy and sell the stock in the same trading session. This is so that they can churn their capital more times and get profits.
To be successful in trading you don't need to know about the entire market. Take a couple of stocks and study them, notice how the fluctuate with the broader maker and indices. Do some apparat trades where you just note down the price at which you are buying the stock...when you hit it right a couple of times .. Start with a small amount.
One shold beware that while trading, you must have strict stop loss( fail safe) price and a target price in mind for the stock. Else it becomes too risky.
Unlike investors, traders are looking for short term gains based on market movement. They generally trade in the low margin high volume category.
Traders normally tend to participate in intraday trades, where the buy and sell the stock in the same trading session. This is so that they can churn their capital more times and get profits.
To be successful in trading you don't need to know about the entire market. Take a couple of stocks and study them, notice how the fluctuate with the broader maker and indices. Do some apparat trades where you just note down the price at which you are buying the stock...when you hit it right a couple of times .. Start with a small amount.
