{"id":15068,"date":"2021-12-14T21:06:08","date_gmt":"2021-12-14T21:06:08","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?p=15068"},"modified":"2021-12-14T21:06:08","modified_gmt":"2021-12-14T21:06:08","slug":"short-term-trading-vs-long-term-trading","status":"publish","type":"post","link":"https:\/\/www.5paisa.com\/finschool\/short-term-trading-vs-long-term-trading\/","title":{"rendered":"Short-Term Trading vs Long-Term Trading"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"15068\" class=\"elementor elementor-15068\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-996e900 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"996e900\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-0f33df4\" data-id=\"0f33df4\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fe3eb6d elementor-widget elementor-widget-text-editor\" data-id=\"fe3eb6d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span lang=\"EN-US\">People always want to find the best type of trade to invest in. This particularly holds true for short-term and long-term trading. This decision, however, varies from person to person. Ideally, the trader must decide on a trading type that best suits his\/her personality.<\/span><span lang=\"EN-US\">\u00a0<\/span><\/p><p><span lang=\"EN-US\">Let\u2019s us take a closer look at short and long-term trading to gain some insight.<\/span><\/p><h5 class=\"MsoNormal\" style=\"margin: 1.0pt 0cm 0cm 0cm;\"><strong><span lang=\"EN-US\" style=\"color: #000080;\">Short-term trading <\/span><\/strong><\/h5><p><span lang=\"EN-US\">When the duration between buying and selling ranges from a few days to a few weeks, it is considered as short-term trading.<\/span><\/p><h5 class=\"MsoNormal\" style=\"margin: 1.0pt 0cm 0cm 0cm;\"><strong><span lang=\"EN-US\" style=\"color: #000080;\">Pros of short-term trading<\/span><\/strong><\/h5><ul><li><p><span lang=\"EN-US\"><strong>Faster means of making money:<\/strong> The benefits of a trade can be realized in a short period through this method. You can earn profits within a day by investing in intraday trading.<\/span><span lang=\"EN-US\">\u00a0<\/span><\/p><\/li><li><p><span lang=\"EN-US\"><strong>Short-term risk:<\/strong> If you discover that a wrong decision was taken on a trade, you can free up the capital invested and reinvest it in fresh stocks. This is because capital is at risk for a shorter period.<\/span><\/p><\/li><\/ul><h5 class=\"MsoNormal\" style=\"margin: 1.0pt 0cm 0cm 0cm;\"><strong><span lang=\"EN-US\" style=\"color: #000080;\">Cons of short-term trading<\/span><\/strong><\/h5><p><span lang=\"EN-US\">Volatile market: There are chances that you may lose a significant amount of money while indulging in short-term trading due to the volatilities in the share markets.<\/span><\/p><ul><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Stress<\/strong>: The unpredictability of the share markets makes it difficult to figure out the future status of your capital. This, in turn, increases your stress levels.<\/span><\/li><\/ul><ul><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Time-consuming:<\/strong> Short-term trading demands a lot of attention. You need to continuously check the market in order to make buying and selling decisions.<\/span><\/li><\/ul><h5 class=\"MsoNormal\" style=\"margin: 1.0pt 0cm 0cm 0cm;\"><strong><span lang=\"EN-US\" style=\"color: #000080;\">Long-term trading<\/span><\/strong><\/h5><p><span lang=\"EN-US\">When the duration between buying and selling ranges within a few months to a few years, it is referred to as long-term trading.<\/span><\/p><p><span lang=\"EN-US\">Pros of long-term trading<\/span><\/p><ul><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Less stressful<\/strong>: There is no need to constantly follow the market when trading long-term. You can ignore the current market conditions and focus on future market conditions. Put simply, you don\u2019t need to babysit your stock.<\/span><\/li><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Time-saving:<\/strong> You can dedicate the time saved from constantly following the market on other productive activities. You can study other stocks and do thorough research before making buying or selling decisions.<\/span><\/li><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Compounding:<\/strong> Long-term trading helps you take advantage of the power of compounding. You will be able to invest the dividends back in the market to earn more profit.<\/span><\/li><li class=\"MsoNormal\"><span lang=\"EN-US\"><strong>Saves taxes:<\/strong> Long-term trading also helps you save taxes. Most short-term traders need to pay around 20%-30% whereas long-term trading activities are charged f only at 5%-15%.<\/span><\/li><\/ul><h5 class=\"MsoNormal\" style=\"margin: 1.0pt 0cm 0cm 0cm;\"><span style=\"color: #000080;\"><strong><span lang=\"EN-US\">Cons of long-term trading<\/span><\/strong><\/span><\/h5><p><span lang=\"EN-US\">Chance of missing out: Long-term trading requires you to invest your capital for a long-term, and you might miss out on a volatility in the market to make money.<\/span><\/p><p><span lang=\"EN-US\">In-depth knowledge: Long-term trading requires you to have in-depth knowledge of the sector or stock you are investing in. You just can\u2019t make decisions based on certain news or hearsay.<\/span><\/p><p><span lang=\"EN-US\">Homework\/Research: You need to do your homework if you are going to trade long-term as you just can\u2019t rely on graphs or charts to make a trading decision. <\/span>Patience: Long-term trading requires a lot of patience and the failure to meet it will create problems for the trader in the long run.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>People always want to find the best type of trade to invest in. This particularly holds true for short-term and long-term trading. This decision, however, varies from person to person. Ideally, the trader must decide on a trading type that best suits his\/her personality.&nbsp; Let\u2019s us take a closer look at short and long-term trading &#8230; <a title=\"Short-Term Trading vs Long-Term Trading\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/short-term-trading-vs-long-term-trading\/\" aria-label=\"Read more about Short-Term Trading vs Long-Term Trading\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":15091,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,73],"tags":[],"class_list":["post-15068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","category-know-everything-about-starting-trading"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/posts\/15068","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=15068"}],"version-history":[{"count":5,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/posts\/15068\/revisions"}],"predecessor-version":[{"id":15073,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/posts\/15068\/revisions\/15073"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media\/15091"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=15068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=15068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/tags?post=15068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}