Daily vs Long-Term Trading in Nepal: Which One is Right for You?
Confused between daily trading and long-term investing in Nepal’s stock market? This guide helps you understand the pros, cons, risks, and which strategy aligns with your financial goals.
Introduction: The Great Investment Dilemma
In Nepal's growing stock market, especially post-2020 boom and 2023 corrections, investors are divided:
Should you chase quick profits through daily trades, or hold for the long haul and watch your wealth grow?
This article compares daily (short-term) trading vs long-term investing in the Nepal Stock Exchange (NEPSE) and helps you identify which fits your financial style.
1. What Is Daily Trading?
Daily trading, or short-term trading, involves buying and selling stocks within a short time — hours, days, or weeks — to exploit market fluctuations.
🔹 Key Characteristics
Quick entry and exit
Heavy focus on price charts and technical indicators
Trades often done through NEPSE’s TMS (Trading Management System)
High risk, high reward
📈 Example in Nepal:
Buying a hydropower stock at Rs. 350 in the morning and selling it at Rs. 370 later the same day.
2. What Is Long-Term Investing?
Long-term investing involves buying stocks and holding them for years — focusing on the company’s fundamentals and overall economic growth.
🔹 Key Characteristics
Buy and hold for 1–5+ years
Focus on fundamentals (EPS, dividend, growth)
Lower transaction frequency
Relatively safer, ideal for wealth building
📉 Example in Nepal:
Buying Nabil Bank shares in 2016 and holding them till 2025 for dividends and capital appreciation.
3. Pros and Cons: Daily Trading vs Long-Term Investing
Feature | Daily Trading | Long-Term Investing |
|---|---|---|
Time Requirement | High (constant monitoring) | Low (periodic review) |
Risk Level | High due to volatility | Lower with quality stocks |
Returns Potential | High (if done right) | Steady, compounded over time |
Tools Needed | Charts, indicators, TMS tools | Annual reports, financial data, MeroShare |
Emotional Pressure | Very high | Relatively low |
Costs (commissions) | Higher (more transactions) | Lower (less frequent trades) |
4. Which Strategy Suits Which Investor?
🧑💼 Daily Trading is Ideal for:
Risk-takers
Tech-savvy individuals
People with time to watch the market daily
Those who understand technical analysis (RSI, MACD, volume)
👨👩👧👦 Long-Term Investing is Ideal for:
Salaried individuals and business owners
Beginners in the stock market
People with limited time for daily monitoring
Those seeking passive income and capital growth
5. NEPSE Reality Check: Does Day Trading Really Work in Nepal?
Liquidity is low compared to global markets. Spreads are wide.
Market hours (11:00 AM – 3:00 PM) limit trade flexibility.
Many retail traders in Nepal lose money trying to "time the market."
But some traders do make profits using disciplined stop-loss and target strategies.
✍️ Note:
While possible, consistent profits in daily trading in Nepal are rare without deep experience, tools, and discipline.
6. Case Study: NEPSE Performance Over Time
Let’s compare two fictional investors:
Investor | Strategy | Investment Year | Stock | Final Value (2025) |
|---|---|---|---|---|
Ramesh | Day Trader | 2020–2025 | Hydro stocks | Lost 12% (due to timing errors) |
Sita | Long-Term Investor | 2020–2025 | Commercial Bank | Gained 86% (with dividends) |
Long-term investors in NEPSE’s fundamentally strong stocks have seen better returns with less emotional burnout.
7. Tools and Platforms You’ll Need in Nepal
Use Case | Tool/Platform |
|---|---|
Buy/Sell Shares | MeroShare, TMS |
Company Research | NEPSE Official Website, ShareSansar |
Charting/Indicators | TradingView (for NEPSE-listed stocks) |
IPO Application | MeroShare |
Portfolio Management | Lenden App, NEPSE App |
8. Blending Both: Can You Do Both Strategies?
Yes, this is called a barbell strategy:
80% of your capital in long-term holdings
20% reserved for short-term or speculative trades
This gives you the thrill of trading while protecting your core investments.
9. Final Verdict: Which One is Right for You?
Criteria | Choose Daily Trading | Choose Long-Term Investing |
|---|---|---|
Time Available | 3+ hours/day | 1 hour/month |
Risk Tolerance | High | Moderate to Low |
Financial Goal | Fast income | Wealth creation |
Market Knowledge | Advanced | Basic to Intermediate |
Most new investors in Nepal should start with long-term investing and gradually explore short-term trading as they gain confidence and tools.
Conclusion: Patience Pays in the Nepali Stock Market
Whether you’re chasing fast profits or building slow wealth, clarity and discipline are key. Nepal’s market offers opportunities for both styles — but only if you understand your own psychology, goals, and risk appetite.
Start small, learn continuously, and adapt your strategy as the market — and your experience — evolves.