Stock trading involves trader, broker & exchange. Trader place a buy/sell order via broker to exchange. An order constitute price and quantity. We get into LONG/SHORT positions via BUY/SELL order. Closing the LONG position is called long unwinding. Closing SHORT position is called short covering. Opening and closing position on same trading day is called Intraday. When the position is kept open it is called positional trading. Every trading day, after the trading hours (3.30 PM) there is a settlement window, where all trade deals are settled. Exchange takes responsibility of settling all trades. Any unsettled trade deals (open short position in intraday) gets into auction mode. Creating a trade plan is mandatory before any trade. The knowledge of risk and reward help in identifying entry, exit and stop loss for a trade.
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