The brief description of trading

What is Trade: Meaning and Definition |


Trading is the economic concept of purchasing, selling, exchanging the financial components. It brings the buyers and sellers on the same platform and accomplishes the economic activity through monetary benefit.

Origin of Trading:

In the prehistoric era trade started for communication among the people. It is believed that the trading was first stated in South West Asia.

Different types of trading:

Active trading is the purchasing and selling of securities based on movement of short terms.  To profit from the movement of price in a short period stock chart. There are four popular types of trading. Day trading, position trading, swing trading and scalping.

Day trading is the buying and selling of the financial instruments within a day. It is another form of active trading style. Day trading is mainly dealt by professional traders.

Position trading is not like active trading. It can be considered as a buy-and-hold strategy. In this trading advanced traders follow the long term charts along with other market indicators which determine the present scenario of the market. This type of trade lasts for several days, sometimes even for a long period.

Swing trading starts its game when the trend breaks. Swing traders start their game when there is some price volatility. The traders start to buy and sell off assets when the price volatility tries to establish in the market. The traders hold their assets for more than one day but not for a long period. These traders decide to buy and sell securities depending upon their technical tools and fundamental analysis. But when these do not work well then they need to depend upon the direction of the market.

Scalping is one of the swift strategies used by the employers. The traders like to hold the securities for the short term and try to reduce their  chances of risk. They prefer the less volatile market for scalping. Since the profit level of small trade is small, the scalpers search for more liquidity in the market to increase the frequency of trades. Scalpers buy at the bid price and sell at the ask price. The gap between the bid price and ask price is being received  by scalpers.

How to open a trading account:

When a company enlists on the stock market, it’s share is available on the market. In the 90s stock exchange adopted an electronic system through which all trades can occur electronically. None needs to go to the counter physically to place the order.

Trading accounts can open individuals, companies, NRI, partnership firms, non-individuals etc. Trading account allows the traders to hold financial instruments.


Trading at is a good profession until you face loss. But if someone understands the market and has realistic expectations and knows how to manage their money, it is good.