Daily vs. Long-Term Trading in NEPSE: Which Investment Strategy Fits You Best?
Confused between daily trading and long-term investing in NEPSE? Discover the key differences, pros and cons, risk factors, and which approach suits your financial goals in Nepal’s stock market.
Introduction: Navigating NEPSE as a Retail Investor
Nepal’s stock market—NEPSE—has seen a surge in retail participation, especially after the COVID-19 era. With mobile trading apps, increased financial awareness, and easier access to demat and MeroShare accounts, more Nepalis are entering the share market. But one question looms for every new and existing investor:
“Should I trade daily or invest for the long term in NEPSE?”
This article explores both strategies—daily trading and long-term investing—so you can make an informed decision tailored to your financial goals, risk appetite, and lifestyle.
What is Daily Trading?
Daily trading, often known as day trading or short-term trading, involves buying and selling stocks within short timeframes—ranging from minutes to days. The aim is to profit from short-term price fluctuations.
Key Features:
Trades executed within a day or week
Profit based on price volatility
Requires technical analysis and constant monitoring
Uses indicators like RSI, MACD, Moving Averages
Tools for Daily Traders:
NEPSE TMS Platform
Charting tools (e.g., TradingView NEPSE, ShareSansar TA)
Indicators: RSI >70 (overbought), RSI <30 (oversold)
News alert channels (bonus news, AGMs, etc.)
Popular Daily Trading Sectors in NEPSE:
Microfinance
Hydropower
Development Banks (D-CLASS)
Life and Non-Life Insurance
What is Long-Term Investing?
Long-term investing involves holding stocks for months or years, targeting value creation through dividends, capital appreciation, and company fundamentals.
Key Features:
Holding period: 6 months to several years
Profit from business growth, not short-term price action
Requires fundamental analysis (EPS, PE ratio, net worth)
Focus on sustainable sectors
Tools for Long-Term Investors:
Annual Reports
NRB monetary policies
Sector outlooks (Hydro policies, Banking regulations)
NEPSE 52-week high/low data
Popular Long-Term Investment Sectors:
Commercial Banking (Class A)
Blue-chip stocks (e.g., NABIL, NLIC)
Hydropower with strong fundamentals (e.g., HIDCL)
Insurance and Development Banks with steady earnings
Pros and Cons: Daily Trading vs. Long-Term Investing
Criteria | Daily Trading | Long-Term Investing |
|---|---|---|
Time Requirement | High (Full-time or hourly monitoring) | Low (Periodic review) |
Capital Requirement | Low to Moderate | Moderate to High |
Risk Level | High (volatile swings) | Moderate to Low (depends on stocks) |
Return Potential | Fast profits but inconsistent | Steady, compounding over time |
Skill Required | Technical & emotional discipline | Patience & understanding of fundamentals |
Tax Implications | Frequent capital gains | Lower long-term CGT if held beyond 365 days |
Brokerage Fees | Higher due to frequent trades | Lower per annum |
Case Study: NEPSE Traders vs Investors (2020–2024)
Example 1: Daily Trading
Stock: NRIC (Nepal Reinsurance Company)
March 2021: Spiked 40% in 3 days on bonus rumors
Traders who entered early exited with 25–30% profit
Those who held too long saw prices crash 35% after news fizzled
Example 2: Long-Term Investing
Stock: NABIL Bank
Jan 2020 to Jan 2024: Price grew steadily from NPR 800 to NPR 1,500
Bonus shares, dividends, and right shares compounded returns
Long-term holders earned over 100% including dividends
Who Should Choose Daily Trading?
Daily trading is suitable for:
Individuals with time to monitor markets daily
Risk-tolerant investors
Those with strong technical analysis skills
Young investors seeking short-term gains
✅ Ideal For:
University students with free hours
Tech-savvy professionals
Traders using tools like RSI, MACD, EMA crossovers
❌ Not Ideal For:
Emotional decision-makers
People with day jobs and limited screen time
Beginners unfamiliar with NEPSE volatility
Who Should Choose Long-Term Investing?
Long-term investing fits:
Salaried professionals, business owners, retirees
Investors aiming for wealth creation, not quick profits
Individuals focused on financial planning (child’s education, home buying)
✅ Ideal For:
SIP-style monthly investors
Dividend-seekers
Passive investors who don’t want to time the market
❌ Not Ideal For:
Those expecting instant profit
Investors with very short investment horizons
What About Hybrid Strategies?
Many smart investors blend both worlds:
Core Portfolio (80%): Long-term stocks like banks, insurance, hydropower
Satellite Portfolio (20%): Daily trades on volatile stocks or IPOs
Example Hybrid Approach:
Hold NLIC, NABIL, HIDCL for 3+ years
Actively trade SHPC, RHPC, or new IPOs for short-term gains
Risk Management: Key for Both Strategies
Regardless of your strategy:
Set stop-losses: Avoid panic selling or deep losses
Follow a trading plan: Don’t chase rumors blindly
Review your goals: Monthly for traders, quarterly for investors
Track your performance: Use Excel, MeroShare, or Trading Journals
Conclusion: Which One is Right for You?
There is no one-size-fits-all. Your best strategy depends on:
✅ Your time availability
✅ Risk tolerance
✅ Market knowledge
✅ Financial goals
If you’re just starting out in NEPSE, try paper trading or invest a small amount. Whether you choose to be a trader, investor—or both—the key is discipline, continuous learning, and adapting to Nepal’s evolving stock market environment.