What is meant by short term stock trading?

Short term stock trading is where a trader aims to capitalize on small price movements of a stock. Some stocks can be very volatile leaving the opportunity to earn big returns in small spaces of time. However, trading volatile shares is often high risk.

Scalping stocks

Scalping generally refers to the opening of a trade and the subsequent closing of the trade after a tiny period of time, often seconds or minutes.

Many stock scalping strategies involve taking profit as soon as a trade becomes positive. As a result of this, scalpers can often make tens or even hundreds of trades per day.

Most successful scalping trades earn a very small amount of profit, so it is very important to have a rigid exit strategy in case the market moves against you. One big loss could quite easily erode all the profits of many successful small trades.

Intraday stock trading

There are many different definitions of what exactly qualifies as intraday trading. Generally the term refers to the opening and closing of a trade within the same trading day. Scalping is often considered to be a form of intraday trading.

As with scalping, it is very important to have a rigid set of trading rules to enable the trader to keep losses small and maximize gains.

Swing trading stocks

Swing trading stocks is in the middle of buying stocks and holding them for the long term and intraday trading. Swing trades are not closed on the same day as opening and can often last several days to several weeks.

Swing traders typically make far fewer trades than intraday traders.

Advantages of short term stock trading:

Trading opportunities frequently arise. Unlike long term trading where optimal trading opportunities may only arise once over a number of days or weeks, the scalper can “cherry pick” his or her trades because so many arise.

Intraday trading strategies can be successful in bear and bull markets. Unlike the traditional buy and hold stock trading strategy where you only profit if your stock goes up in price, traders can capitalize by going long or short.

Disadvantages of short term stock trading:

Often considerably more labor intensive than longer term trading.

The short term trader often has to watch the markets for many hours a day where as a buy and hold investor can invest his or her money and passively observe.

As brokers charge for each stock trade, large quantities of trades can results in large fees. This can often keep smaller traders out as the fees would cut to deep into any potential returns.

It can be a very stressful way to trade.

Sitting at a PC for hours upon hours each day intensely watching your stock prices can be exciting for some. Other people find it stressful and possibly even tedious. It certainly is not for everybody!


In conclusion, short term trading stocks can unquestionably be very profitable. As a result of the masses have come flocking to get rich quick. Unfortunately, the vast majority of traders with this mindset will lose money, often a lot of money.

It is no secret that most short term traders lose money. However, if you are prepared to work hard, be very disciplined and prepared to put a significant amount of time into your trading, you stand a better chance than most of making a success of it.