Trading Styles & Why Stock Prices Change: A Beginner’s Guide

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Understanding how the stock market works is not just for experts—it’s for anyone looking to grow their wealth. One of the most interesting things about the market is that stock prices change constantly. For beginners, this can seem confusing: why is a stock $100 now and $101 just minutes later?

In this guide, we’ll explain it step by step: why prices move, and the most popular trading styles that investors use to profit from these fluctuations.

Why Do Stock Prices Change?

1. Supply and Demand

The most basic rule in the stock market is simple:

  • If more people want to buy a stock than sell it → price goes up.

  • If more people want to sell than buy → price falls.

Example: If a tech company launches a new smartphone that everyone loves, more investors want to buy its shares. Higher demand = higher price.

2. News and Company Events

Stock prices are highly sensitive to both company and global news:

  • Positive events (strong profits, new projects, partnerships) → prices rise.

  • Negative events (losses, lawsuits, economic slowdown) → prices fall.
    Even global events like oil price changes, interest rate updates, or geopolitical tensions can move markets.

3. Investor Psychology

Markets are driven by emotions—fear and greed.

  • Greed → people rush to buy, prices rise.

  • Fear → panic selling, prices drop.

4. Short-Term vs Long-Term Movements

  • Short-term: Daily fluctuations caused by news, demand, and emotions.

  • Long-term: Reflects the company’s real performance and profits.

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Trading Styles: How Investors Profit from Price Movements

Since stock prices move constantly, traders use different strategies to make gains. Here’s a breakdown:

1. Intraday Trading

  • Meaning: Buying and selling stocks within the same day.

  • Holding Time: Minutes to hours, never overnight.

  • Goal: Capture small daily price movements.

Example: Buy TCS at ₹3,200 in the morning, sell at ₹3,240 before market closes → profit ₹40 per share.

Pros: Quick profits, no overnight risk
Cons: High stress, requires constant attention
Suitable for: Active traders who can monitor the market all day

2. Scalping

  • Meaning: Ultra-fast trades lasting seconds to minutes.

  • Goal: Earn tiny profits multiple times a day.

Example: Buy Infosys at ₹1,502.50, sell at ₹1,503.00 → profit ₹0.50 per share. Repeat 50 times → significant gains.

Pros: Quick, frequent profits, works even in small price movements
Cons: Very high stress, requires advanced tools, fast internet, and experience
Suitable for: Only skilled traders

3. Swing Trading

  • Meaning: Holding stocks for several days to weeks.

  • Goal: Capture short- to medium-term market trends.

Example: Buy Reliance at ₹2,400, hold a week, sell at ₹2,550 → profit ₹150 per share.

Pros: Less stressful than intraday/scalping, manageable for semi-active traders
Cons: Overnight news can impact prices, requires some technical analysis
Suitable for: Beginners who can’t watch the market all day

4. Positional Trading (Long-Term Trading)

  • Meaning: Holding stocks for weeks, months, or even a year.

  • Goal: Capture bigger trends over time.

Example: Buy a stock before a new product launch, sell after it gains 20–30%.

  • More like long-term investing with a trader’s mindset

Comparing Trading Styles

Trading StyleHolding TimeRisk LevelSuitable For
ScalpingSeconds to MinutesVery HighExpert traders only
IntradaySame DayHighActive traders
SwingFew Days to WeeksMediumSemi-active traders
PositionalWeeks to MonthsLow-MediumBeginners & part-time


Summary: Key Takeaways for Beginners

  • Why prices change: Supply & demand, news, global events, and investor psychology.

  • Short-term volatility vs long-term trends: Markets fluctuate daily, but long-term trends reflect company performance.

  • Trading styles:

    • Intraday → same-day trading

    • Scalping → ultra-fast, tiny profits

    • Swing → few days to weeks

    • Positional → long-term trend capture

Understanding how stock market works and these trading styles gives you the knowledge to start smart investing.

(A small tip: If you are starting to trade in stock market or invest in stock market do not use your al capital at once if its gone at the start then you do not have any capital to take next trade so be aware about it)


Welcome to Capital Clarity – a platform dedicated to simplifying finance, investment, and wealth-building for everyone. Our goal is to provide clear, practical insights into money management, trading, and smart financial choices. Whether you’re a beginner taking your first step toward financial literacy or an experienced investor seeking fresh perspectives, CapitalClarity is here to guide you with unique content, real-world strategies, and resources that add value to your journey.

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