In India, There are major two exchanges operational in terms of turnover, volume, number of clients & scrips listed i.e The Bombay Stock Exchange (BSE) & The National stock Exchange (NSE)

Broadly, equity stock Trading & Derivatives trading is what I would like to highlight on.

First, talking of Equities meaning shares that are listed on the exchanges & widely traded. This blog is to give a basic, lay-man understanding about the trading done.

According to me, there are major two sections in markets. I.e. Traders & Investors. Trading  are for me, who are speculators, people who want to make quick bucks, and investors who ply their money to gain returns from short period of time - more than 15 days to 6 months. 

However, stalwarts & big Brokerage houses' analysts, relationship managers recommend investing means plying your money to expect returns from period 6 months to 1 year. I would like to call them short-term investors. Theoretically  people from the industry say that periods of investment & terming them short-term & long-term varies from person to person. But, since working in the markets tells me that investments for 6 months to 1 year should be short-term trading and not investments. Because Investing according to me is basically done on fundamentals & any Tom, Dick & Harry would tell you that fundamentals do not change in such short periods. For the fruits or changes to seep in the balance sheets would atleast take businesses 1.5 to 2 years.


After broad classification on methods of doing business on the exchanges, let me bifurcate trading & investment in terms of period of returns (Profit / Loss). they are as follows:-

Also to give a new dimension to the terms trading & investment, I would say targets got by seeing technical charts should be purely meant for trading purpose, whether its for 1 or 2 yrs targets. Charts are representation of human behaviour to the change in prices & volume; whereas Balance sheets and targets from them are purely representation of the business done. So according to me targets derived from purely accounting is what I call investment. If someone would argue that changes of prices due to news flow of companies in terms of new set-up, product-line, Financial results in the short-time is 80% due to speculation. since the actual numbers of these news will reflect in balance sheets or profit & loss statements after the news are implemented. 

A) Trading

     i) Intra-day                                     - Trading done during the day i.e. 8.55 am to 3.30 pm.

     ii) Buying today a stock & selling it the very next day.

     iii) Positional Trades                   - Trading done with the expectation of returns from 5 days to 15 days

     iv) Short - term trading             - Investing money in the equities to expect returns within period of 1 month to 3 months.

v)  Medium-term trading        - Trading done with expecting returns from investment done for a       period of more than 3 months to 6 months.

     vi) Long - term trading              - Trading or investing for period of 6 months to 1 year.

B) Investment

     i) Short term Invt.                       - Investing on basis of numbers for period of 6 mths to 1 year.

     ii) Medium - term Invt.             - Investing on basis of numbers to expect returns from period of 1 year to 2 years

     iii) Long - term Invt.                    - Investing for a period of more than 2 years.