When a buyer and a seller prices for the same stock matches then stock trading takes place. Broker sends the orders to the exchanges and exchanges execute them upon matching.
In stock trading mainly there are two types of orders – Day trading orders and Delivery orders. Again there are buying and selling orders in these two orders.Day trading orders are intraday orders which are done within the day where as Delivery orders are taken to keep the position for more than one day. Again one can create two positions in placing the order.
Long Position: When you expect a stock to go up you buy it now and sell it later when the price appreciates. You can sell this within the day or take a delivery to keep it for more than one day.
Short Position: When you expect a stock to go down you sell the stock now and buy it later when the stock goes down. The difference will be your profit.
Long position orders are good for more than one day but Short position orders are good for one day.
One should go for trading with Trade Plan. Trade plan is nothing but planing yourself for the trade. It should include when to enter and exit the trade and calculating the stop loss.
One has to do trading with knowledge and discipline to increase your chances of win over loses. A trade plan again increases your chances of win. Trying to know the market before you enter is like knowing the battle field before the war. So studying the market is important for trade planning.
