Mechanism of Stock Trading: The buyer and sellers register themselves with a broker who himself registered with Stock Exchange. If the buyer and seller wants to buy or sell they place the respective order with Broker and he executes the order with the exchange. SEBI regulates this transaction.If a buyer or seller wants to buy or sell they place the respective order with Broker and he executes the order with the exchange. There are two orders. Buy order and Sell order. Validity of the order is for one day for intraday trading with the cut off time at 3.30 PM when the stock market closes.
Reason for trading: People choose stock trading either for investment or income. Positional trading helps to build a investment by choosing right stocks to by and holding it for a longer period and thereby to maintain a good portfolio. Intraday traders are usually do stock trading as a source of income. They buy and sell stocks on the same day for a little profit.
Terminologies to remember: Long: If a buyer expect price of a share to increase he will take a Long position which is first buy order of the stock.
Short: If a seller expects price of a share to come down he will take Short position which is a sell order of that stock.
Long unwinding: If a buyer place a sell order of a purchased stock then it is a Long unwinding position.
Short covering: If a seller place a buy order for a sold stock then it is short covering.
Positional Trading is buying a stock and holding it for some time to consolidate a reasonable profit and selling it.
Intraday trading is Buying and selling the shares on the same day between 09.00AM to 03.30 PM.
, , Basics of Stock Trading, Entry Level, long, short, short covering, Stop Loss, Target, Trade plan, unwinding
