Short Term Trading Tips, How to avoid short term trade in the Stock Market & Short Term Trading Options

We all understand the value of money but a few understand the refined difference between expanding and investment. A fine and well analytical brain capability is required to decide the right option to invest. Elaborating it further requires segmenting the area of investment into two major groups i.e. short term investments and long term investments.

Short Term Trading means trading strategies within a range of a few days. These strategies are executed in cash and future segments in the stock market. Short term trade is also called swing trade. It means holding either buy or sell the stock for a few days. There are some popular short term strategies are given below:

• Day Trading
• Short Sell Trading
• Margin Trading
• Position Trading

Best Short Term Trading Tips

• Knows your Entry and Exit Rule
• Keep Strict Stop Loss
• Use the Technical Indicator
• Make a Proper Plan 
• Manage Risk 
• Always Keep Learning

Advantages of short term investments

With the appropriate knowledge and precise analysis of the market, short term investments have many advantages.  To get more clarity over the advantages of short term investments these aspects can be very helpful:-

1.  Flexibility to switch: contrary to the long term short term investments It gives you the freedom to take advantage of the current market situation and then invest the same amount in other better options.
2. Quick Returns: Going with the right option in short term investments gives us the returns in a short period which makes this the best option with the freedom to exit any time.

Reason to avoid short term trade in the Stock Market

In short Term, Stock Markets are risky. Everyone is aware of this but all are doing again and again and making losses in trade due to high volatility. There are many following reasons to avoid short term trade in the Share Market.

• Brokerage Charge
• Capital Gain Tax
• Financial Loss
• Due to High Volatility 
• Depository Charges

Short Term Investment Option

The word “Investment” is to describe how to generate revenue. Most of the personal desire to grow up their capital or revenue in a short certain period. The word short term investment is one of the best options for generating revenue. Period of short term investment is (5 yrs or 3 to 12 months). Where people can be invest fund & earn maximize of revenue. It’s a temporary investment plan whose main motive is to provide considerable returns in a short terms period. Its main objective of Short term investment& protect their investment after that generating a handsome return. Well, all we also have known it’s marketable security or temporary investment plan. Which can be easily converted into cash. Most of the common short term investment option is under below-

• Bank fixed deposit
• Recurring deposit
• National Savings certificate
• Debt mutual fund
• Savings accounts

Bank fixed deposit

Bank fixed deposit is one of the best investment policy scheme (FDs). All are the people well aware of it. It’s a safe short term investment by which investor generate a lump-sum rate of interest. Bankers provide us rate of interest subject to the market or RBI rules. Fixed deposit scheme period should be 7, 14, 30, 45, days to up to 10 years.

Recurring deposit

RD Recurring deposit is another way to investing their fund with the faith of safe of investment.  RD is a small investment plan which provides us with a facility to invest the fund every month. Which lock-in period maybe 6 months and a maximum period of 1 year.

National Savings certificate (NSC)

National Savings Certificate is the best way of investment. National savings certificate is one of the best savings product of investment, provided by the Post Office. It’s the best product investment plan (without any risk). It is a fixed income investment scheme which we have to open any post office. We can say NSC is a saving bond that provides by the A Government of India. Its period is 5 or 10 yrs.

Debt mutual fund

It’s an another a scheme where an investor invests their fund. It’s fixed income securities & issued by the government & companies. We have known it’s as a Mutual Fund Scheme which is subject to market risk.  It is ideal for investors whose aim for regular, but the risk is averse. 

Savings accounts

A saving account is an account where a person should have to open their own account. The main purpose of this is account is to deposit their fund for parking cash for short-term needs. Rate of interest is very low of these accounts. We say it is a safe and easy access fund option account.

Conclusion

The short term investment is a small investment plan to focus on getting maturity within a lock-in period. It’s the best plan where investors investing fund with full of security and generating good returns on investment in a certain period. The main objective of short term investment is full fill short term goal i.e. school fees, some small gift, tax benefit etc.