The exchange of services or goods between two parties is referred to as trading. Stock trading is a type of trade that occurs between investors and companies, carried out in an organized market and follows regulations. India has regulatory agencies that monitor and maintain the integrity of the country’s financial markets.

Stock trading involves the buying and selling of stocks in both the secondary and primary markets. People who trade stocks have different strategies that they can utilize depending on their goals, trading orientation, and duration.

Types of Trading

People who trade stocks use different types of strategies depending on their convictions and knowledge. One significant issue is that one strategy may not work for everyone like in gaming, so traders diversify their approach to stock trading. The market has gone through numerous innovations over the years, and investors now have more options than ever when choosing their preferred style of trading.

Here is a list of the key types of trade in the stock market:

Intraday Trading

One particular type of stock trading that is commonly practiced is intraday trading. Although it is a profitable technique, intraday trading comes with some risks. In this type of trade, participants buy and sell stocks on a single day.

Day traders, who are responsible for closing their positions on the same day, must monitor the movement of the various indices, stocks, and exchange-traded funds (ETFs) to determine the best time to place their orders. They can utilize a buy first, sell first, or go for a buy second strategy. However, novice investors should refrain from margin trading as it can increase their losses.

Positional Trading

Positional trading requires participants to keep track of a stock’s movement before placing an order to buy. Unlike day trading, positional investing doesn’t allow them to sell first and then buy later. This type of strategy is ideal for investors who are looking to capitalize on short-term gains while still focusing on long-term goals.

A trader who uses positional trading utilizes price action to determine entry and exit points for their positions. They can also use support and resistance lines established on a chart to visualize the stock’s journey. In addition, some traders utilize technical indicators to determine the direction of a particular stock. These include the moving average, the MACD, the simple moving average, and the RSI.

Swing Trading

A swing trader uses a variety of time frames to analyze a chart, such as five, 10, 15, 30, 60, or even 24 hours. This type of trading is commonly considered to be the toughest because of the constant monitoring and high volatility.

Swing traders consider volatility as their best friend, as it increases their chances of making money. This type of trading is ideal for individuals who are looking to take advantage of the volatility in the market.

Long-Term Trading

One of the safest types of trading strategies is long-term investing, which is typically favored by conservative investors. This type of trader focuses on a company’s growth potential and uses various factors such as economic updates and balance sheets to analyze the stock’s movement.


Unlike day traders who focus on identifying potential profits, scalping involves creating multiple short-term positions. This type of trading is commonly performed by individuals who are experienced in the market. Aside from being able to identify a stock’s direction, a scalper also requires high levels of observation and experience to place orders.

Most of the time, a scalper will lose a few trades. Following the market close, they compare their profit and loss to see which one is better. A short-term trading position involving this strategy can last for a few minutes.

Momentum Trading

One of the most common types of trading that is commonly performed by stock market professionals is momentum trading. This strategy involves entering or exiting a stock based on its movement. Momentum traders need to determine when the stock is likely to break out and when the price is at its lowest.