In simple terms the frequently buying and selling of stocks or shares of a company in order to take profit from price fluctuation is called stock trading. Stock trader falls in two categories: first those who buy and sell more than ten share a month and hold the position for more than one day are called active traders and second who buy, sell shares and closing their position on the same day are called day traders or intraday trading.

Liquidity means the degree of ease to which an asset or security can be bought or sold in a market without affecting the price in the market or in other words, how easily it can be converted into cash. For day traders, liquidity is a very important factor in formulating a trading strategy as well as in executing a stop-loss order. A trader can quickly analyze liquidity by looking at bid-ask spread or by checking its daily traded volume that is the number of shares being traded each day. The float also affects the liquidity of a stock as it refers to how many shares are available for the public to trade.

With the development in technology, investing in the stock market have become very convenient. A person has to open an investing account with a broker and he is ready to invest in stock market. There are two types of approach for investing in the stock market i.e. passive investor and active investor. Passive investors are those who like someone well trained to manage their money for them and active investors are those who manage their money by themselves. Both the approach comes with their own advantages and drawbacks.