Experienced stock traders employ different types of trades in the market:
Intraday Trading:
Intraday trading is also known as day trading. Investors buy a share and sell it on the same day before the market closes to take advantage of the price movements within a day. Since the shares are bought and sold within a day, there is no delivery of the stock in your demat account after settlement. Day traders use margin funding i.e. take credit from brokers for intraday trading which can magnify the profits but also increase the risk of losses.
Delivery Trading: Delivery trading is the opposite of day trading. An investor buys a share with a long term perspective and the shares stays in the investor's demat account till it is sold. Unlike intraday trading, the investor allows time for the stock to grow in value, pay dividends and capital gains as the company’s business grows. It is the safest and conservative form of stock trading. A delivery investor or trader must pay full amount for investment unlike a margin trader.
Swing Trading: Swing trading is similar to intraday trading with a difference that the security or financial commodity is held for more than a day to a few weeks to take advantage of price movements and trends in the market. Swing trading requires the trader to understand the market trends, price fluctuations and underlying factors. It is suitable for more experienced traders.
Technical Trading: Technical trading relies on careful study and research of stocks with charts and price movement graphs, studying patterns and making buy or sell decisions based on emerging technical analysis. Technical trading is for knowledgeable and experienced traders as it requires study and risk taking ability.