Various trading styles

Investors and traders basically have two moods - bearish and bullish. The conventional way to trade is a bullish attitude wherein you buy any stock or futures and sell after the value is increased. It requires a stronger conviction and larger risk appetite to go for shorting the trade.
Lets see with examples:

Vinay has Rs.10,000 to trade. This is Vinay's capital. Assuming that Vinay is a beginner in stock market, he would be having a low risk appetite viz he can afford to lose not more than Rs.100 to 200 in a single trade.

Vinay opts to buy ICICI Bank Ltd shares.

His 1st Trade: Vinay sees opportunity in buying ICICIBank at Rs1020 per share. Thus in his small capital of Rs.10,000 he can buy 9 shares.
After  few trading sessions, Vinay sees his trade was successful and he sees ICICI at 1080 level, he has earned profit of Rs.720 which is unrealized as he hasn't actually sold his shares.
Few days later the stock starts to fall, again coming to Rs.1020 levels. All the unrealized profit on his position/holding are lost.
So Vinay decides that next time when he gets the profitable position back, he will exit the stock quickly!!

The very next morning ICICI bank rises 55 points and reaches 1075 levels. Vinay gets little greedy (which is not wrong). His conviction that the stock of ICICI Bank Ltd is good gets stronger! and he decides to hold on for some more time.
Now, as the stock moved up several points in a single day, it comes down on account of profit booking. Vinay now has been tracking the movement of the stock and therefore has reduced fear in himself which is replaced by discipline.
 His discipline  pays off, ICICI bank rises in consecutive sessions. When it reaches Rs.1140, Vinay sees  he is sitting on profit of Rs.1,080 on his capital of Rs.10,000 which is 10%. He therefore decides to book profit and sells his 9 shares of ICICI bank. His capital has now grown to Rs.11,000 (adjusting the brokerage).

The stock rises more, but Vinay is happy that he learned and earned in a disciplined way!

One should note that catching exact bottom of a movement viz Buying opportunity and exact selling at the top is not always possible and hence should not be aimed for. Always aim for a chunk of the rising wave leaving the bottom and top on the table.
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Short Selling

We also have Mr. Deven, he is more experienced than Mr. Vinay in stock market trading and also has a capital of Rs.50,000.

Deven is more bearish about the market and believes that the banking stocks will eventually fall off.
He therefore tracks his favorite ICICI Bank stock. Deven has tracked ICICI for along time and has observed that the stock has shown huge upward movement in short span of time and therefore can fall off once trend reverses.
One fine day, Deven sees that ICICI Bank is struggling to cross 1200 levels and therefore shorts the stock viz Deven sells ICICI at 1200 levels , without owning them = Short selling.

Deven  shorted 20 shares with half of his capital. This is a good idea - Never play with whole capital on a single stock or in a single trade!

In that day itself around last hour, closing time Deven sees ICICI at 1160 levels. This means Deven has a profit of 20x (1200-1160) = Rs.800. He thinks was a good trade to earn 800 intra-day and therefore 'Covers' his position vix buy 20 shares of ICICI bank from market. This is called Short Covering!

Thus Deven utilized his understanding of ICICI bank's movement and earned handsomely in a falling market.
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These were two typical styles of trades in which Vinay was bullish and Deven was bearish on a particular stock. The point to be noted is that both initiated the trade when they saw opportunity thus timing is more important than the size of capital. Also, discipline and patience is the key.