|
Methods of buying and selling of shares
Given
below are the types of orders which are used for buying and selling of shares.
Market order: When
you put buy
or sell price at market rate then the price gets executed at the current rate in
the market. The market order gets
immediately executed at the current available price.
In market order there is no need to mention the price; the shares will get
executed at the best
current available price.
If you wish to buy or sell shares at any specific price, i.e. market order is
not suitable for you then you have to go for limit order.
Market order is for those who want to buy or sell immediately at the current
available price.
Limit order –
It’s totally different from market order. In this, the buying
or selling price has to be mentioned and
when the share price comes to that price your order
will get executed at the price mentioned
by you.
But here it’s not sure that the price will come to your limit order.
In day
trading it’s risky because
you have to close all your transactions before 3.30 pm and if in case the price
doesn’t reach to your limit order, your order will be open and then you have to
go through (bare) heavy penalties. Importantly, limit
order and stop loss trigger price are used together.
Stop loss trigger price: Stop loss and trigger price are used to reduce the losses. This is a
very important term especially if you are day
trading (intraday). Stop loss,
as the name indicates, is used to reduce the loss.
You can
use a pivot calculator for simple
stop loss calculation for delivery based trading and
intraday stop loss depends
on how much you are ready to lose – the maximum amount you are ready to lose- it
also depends on the price movements of the scrip for that particular day
|
