Do You Know Your Purpose for Trading?

Published by Sharekhan Education | August 5, 2022

Anand Sharma | Sharekhan Education 

Do You Know Your Purpose for Trading?

Trading consists of several processes, the first of which is determining your trading goal. We learned about numerous purposes in the core strategy class, such as hourly income trade, daily income trade, weekly income trade, and monthly income trade. The primary challenge here is which trade purpose to select. While mastering one trading technique is critical, the trader must adapt to other techniques as well.

Let’s start by looking at some trading purposes, their benefits and drawbacks, and how you can choose one that best meets your needs.

Intraday Trading Styles: 

Hourly Income Trading:

This is a trading method for those who can look at the market all day by sitting in front of their computer. The hourly income trader has three-time frames: 75 minutes, 15 minutes, and 5 minutes. Curve definition takes 75 minutes, trending takes 15 minutes, and execution takes 5 minutes. The Indian market is open for 6 hours and 15 minutes, which means that traders’ perspectives shift every 75 minutes. In this trading strategy, traders hold positions for a few seconds to a few minutes. It is a rapid trading strategy; if you do not want to miss out on an opportunity, you must keep a close eye on the market.

Daily Income Trading:

Daily income trading involves selling and buying trading assets on the same day, with no holdings retained overnight. At first, every trader chose this trading strategy with the expectation of becoming wealthy overnight. Day trading is not for everyone; it necessitates continuous monitoring and management of open positions in relation to the benchmark index. With a thorough grasp of the market and the use of trading techniques such as bracket orders with trailing stop losses, it is ideal for intraday traders.

Pros:
Because all positions are closed intraday, there is no overnight risk. Most brokers offer more leverage for intraday trading, which boosts the return on investment.

Cons:
You must stay alert in order not to miss any trade possibilities. You make a forced trade when you don’t have any trading opportunities.

Swing trading:

Weekly Income Trading:

This is a style of trading in which traders hold their positions for a few days to a few weeks. The longer the period, the greater the opportunity; the likelihood grows with the time frame. Traders trade on a weekly, daily, and 125-minute time frame. Because the position is intended to be held for a few weeks, no regular monitoring is required. This makes it a favorite trading style among those who do not have time to sit in front of a computer all day and prefer to trade in their free time.

Monthly Income Trading:

This is a type of swing trading in which the trader holds a position for several weeks or months. Traders trade on a monthly, weekly, and daily time frame. The conservative trader prefers this style because they do not have time to analyze trades daily. It’s a good idea to evaluate stocks on a monthly or weekly basis and set up alerts in your system.

Pros:
You paid the full value of the stock, which became an asset with no liabilities. The easiest method to trade is because most trades are executed in a larger time frame.

Cons:
The trade is executed without leverage, lowering the return on investment. Carrying a position for weeks or months exposes you to overnight risk.

For a better understanding of different trading, purpose visits us at  www.sharekhaneducation.com. Or attend our FREE power money webinar at https://sharekhaneducation.com/free-workshop.php

By enrolling in this stock market course, you can learn the basics and the various aspects of trading in Futures and Options.