Delivery Trading and Investing

Most people are confused about the difference between Delivery trading and Investing. In both types of trading styles, traders buy shares and hold them in their demat account. 

Then how do these two differ?

 Delivery Trading

• You buy shares and take delivery of them into your demat account. You can sell them any time (after T+1 settlement in India).
• Usually short-term to medium-term (days to weeks or months).
• Capture price movements;  buy low and sell high.
• More active than investing, but not as fast-paced as intraday.

Example: Buy Infosys shares today because you think Q2 results will be strong, hold them for 2–3 weeks, and sell at a profit.

 Investing

• Buying shares (or other assets) to hold for a long-term horizon.
• Long-term (years or decades).
• Benefit from business growth, compounding, dividends, and wealth creation.
• Passive; no tracking of daily price movements required, with a greater focus on fundamentals.

Example: Buy Infosys, believing in India’s IT growth story, hold it for 10+ years, ignoring short-term volatility.

Why do we promote short-term trading or swing trading for beginners?

Swing Trading or Short-term trading

Holding a stock for a few days to a few weeks to capture short- to medium-term price moves. Basically uses charts and fundamentals

Example: A stock breaks out of a resistance level, buy and hold for 5 or 15 days until it hits the next target.

Why Swing Trading is Better for Beginners?

Less stress: you don’t need to sit glued to the screen all day.

Learning opportunity: the market structure, price fluctuation, creation of swing highs and lows.

More time to decide: you can analyze the end-of-the-day chart after market hours.

Safer than intraday: because you can wait out small volatility.

Good balance: faster than long-term investing, no need to hold money for a long period (2 or 20 years),  not as risky as intraday.

Teaches discipline:  entry/exit planning, risk management, stop-loss usage.

Before we try to test our luck in intraday, we need to understand the Challenges for Beginners

Beginners should identify these core issues and prepare.

Need patience: don’t panic when the market goes opposite to your expectations.
Risk management is key: use stop-loss, don’t risk more than 1–2% per trade.
Avoid overtrading: 2 or 4 good trades a month is enough.
Must learn basic chart reading: support, resistance, trendlines, moving averages, RSI.

In short, if you want to start trading, then start with swing trading. Slowly and steadily, you will understand the market nuances without taking high risk and wasting your time.