1. Short term investment
2. Mid term investment
3. Long term investment
Short term investment
Investment done from couple of weeks to couple of months is called short term investment. It is done based on breaking news, or based on charts of technical analysis.
Mid term Investment
Long term investment
Investment done from one year to couple of years like 3 years, 5 years, 10 years etc Long term investment is basically done after thoroughly analyzing the fundamentals of the company and its future growth prospects.
And also the wise investor invests in companies whose current share prices are undervalued but its future growth is huge. Generally long term investor is worry free from daily markets up and down and share prices volatility.
Buying and selling of shares based on technical analysis or market trend taking into consideration very short duration like from a single day to couple of days is called trader.
Mostly trading is done throughout the day and wit is called as day trading or intraday trading. Trader buys and sells the stock and he is not worried about the company’s performance or how good the company is.
Types of Trading
Trading is done on stock price for a day or for couple of days.
Trader is not worried about company performance; he is only worried to book profits whenever the share price rises. Basically there are two types of trading methods
Buying and selling of shares on daily basis is called day trading.
Day trader don’t carry stocks to next day, he square off the positions (shares) on same day.
a swing trader is just like a day trader but swing trade may hold the shares (positions) for couple of days like 4 to 5 days, while day trader doesn’t hold shares even for next day.
Swing trader basically trades based on news, breakout and breakdown in technical charts,
based on volume surge, based on up and down trade etc.
Based on understanding about stock and scrip one can take bet to act as trader or investor. In order to become trader it requires some amount of knowledge and experience.