All of us know that trading is all about procuring goods from a manufacturer or a wholesaler and selling them for a profit to those who need them. Although trading in stocks is like any other type of trade can be quite lucrative, it is not all that simple.

In the case of dealing with goods, the trader can fix the price at which to sell, making sure that he makes a profit. The price of goods is usually stable and doesn’t go down from the purchase price whereas the price of shares keeps fluctuating by the minute depending on numerous factors influencing supply and demand.

People participate in the stock market mainly for two reasons.

• For a long term investment in stocks of good companies that give periodic returns and a decent price appreciation over time.
• To make quick money by way of buying or selling by taking advantage of the price fluctuations. Traders come under this category

We have two types of traders:

A trader who purchases stocks to hold them for a certain period, anticipating the price to go up shortly, and sell them at a certain percentage of profit. It can be for a few days, weeks, months, or years. This type of trader is called a positional trader.

The other type of trader is a day trader or the Intra-day trader. This is a person who would like to see the result of his trade on the same day and is prepared to take higher risks. As an intra-day trader can buy or sell stocks worth up to even ten times the money on hand, the risk of losing money is high if he indulges in this without proper discipline and a clear strategy. An Intra-day trader must compulsorily complete his trade before the end of the trading day.

The Intra-day trader must be disciplined and adhere to a certain strategy that he has evolved depending on his risk appetite and mental make up.