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Types Of Online Trading - Science/Technology - Nairaland

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Types Of Online Trading by johnnpaul9: 9:59am On Feb 22, 2021
We have categorized online trading into 3 types:

Quick Trades: Scalping and Intraday Trading
Positional Trades
Investing: Share Investing and Mutual Funds Investing

Quick Trades
Scalping


In scalping, the trades are taken only for several seconds to minutes, this strategy is mainly used in high volatile stocks to make the most of price movements. It is often referred to as micro-trading. Traders involved in scalping execute hundreds of trades in a day.

Scalping falls in a very high risk category and requires a good amount of experience and expertise in the stock markets. You can do scalping with a small amount of money via leverages.

Intraday trading

As the name suggests, intraday trading is basically buying and selling of shares on the same day. It is also known as day trading. The holding time in intraday trading can vary from a minute to hours. Usually, intraday trading is done based on technical analysis and news or events.

Intraday Trading also falls in a very high risk category and requires some expertise in the stock market. You can do intraday with a small amount of money via leverages.

Learn everything about Intraday Trading here.

Positional Trades
Positional Trading


If you hold a stock for more than a day it is known as positional trading. It is based on the idea that the value of the stock will appreciate in several days to months. Here the traders follow a trend and wait for it to peak.

Positional Trading can further be categorized into swing trading, which is again a trend following strategy but is popularly said to have a holding period of several weeks.

Positional Trading falls in the medium risk category and requires a higher amount of capital as you need to pay the full amount for the shares you buy.

Investing
When you buy shares to hold them for several months or years, it is called investing. Investing can be done in shares or mutual funds.

While Investing in shares falls in the medium-risk category, mutual funds are considered to be low-risk instruments.

Best Company Offering Online Trading in India
There are two types of brokers, a discount broker, and a full-service broker.

A discount broker provides you trading and investing services at the lowest possible cost and a full-service broker provides full-blown services like investing tips, hand-holding, trading reports, etc. but all these services come with a higher cost.

Well, Aliceblue is an Exception! We provide the services of a full-service broker but at a cost of a discount broker. Meaning, we charge the lowest brokerage yet provide full-blown services like a full-service broker.

Check out What is Online Trading and learn more about online trading and how to trade in online

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