What is trading? What are common trading strategies?

Trading is an activity of buying and selling stock based on short term or long term price movement. Basically two types of trading strategies is available one is active trading another is buy and hold trading strategy.

Active trading strategy (short term) is suitable for short term investor while buy and hold strategy (long term strategy) is suitable for long term investors. Here I have some trading strategies which come in active or long term strategy.

Intraday trading:

Intraday trading strategy comes in active trading strategy (short term trading strategy). In intraday trading buying and selling of stock are done on same day before the market gets closed. No position is held for next day. Intraday trading is an active trading style. Traders who trade in intraday trading are called active trader. Intraday trading can be risky if trader trades without money management or trading disciplines. In day trading strategy traders used to make profit from difference between buying price and selling price within same day.

Position Trading:

Position trading comes in buy and hold trading strategy. Long term investor trades in position trading strategy. Position trading technique use daily charts and some indicators to find trend in market. These types of trend can lasts for a week or a month. Positional traders trade when market is moving in one direction. Positional traders trade when trend has established and leave market when trend is about to break.

Swing trading:

Swing trading comes between short term trading and long term trading. In swing trading trader hold the scrip for more than one day like 2 to 3 days. Swing traders generally create some algorithms from fundamental and technical analysis. Using that technique swing trader identifies entry point and exit point to the market. Swing traders gets active when one trend is ending and new trend is about to start. Swing trading strategy works best when market is going in one direction up side or down side.

Scalping:

Scalping comes in an active strategy. This strategy is employed by active traders and lasts for very short period. It is a day trading strategy and focuses on making small profit from many trades. Scalper holds stocks for very short period and that way they decrease the risk of money loss. Scalper does not wait for long moves in market they take advantage of smaller moves that happens frequently. Scalper generally likes to trade when the market in range bound or sideways.