Intraday Trading Definition

What Does Intraday Means in Stock Market?: Intraday means buying and selling of stocks on the same day during the market hours. In this trading, the stocks are purchased not for the intention to invest but to earn profits by keeping an eye on the movements of the stock market. In this trading type, the orders are squared off by the end of the same day that is why it is known as Intraday Trading.

Know More About: Intraday Meaning.

Intraday Trading Strategies

1. Scalping

In this strategy, you will earn small profits by making numerous attempts in trading on small prices that change throughout the day.

2. News-based Trading

In this strategy, you will make your decisions on trading based on the news or any events which will make a difference in the stock market.

3. Range Trading

About this strategy, you will use this based on the support and resistance level to determine the buy or sell on the particular stock.

4. High-frequency Trading

You can use this strategy based on the algorithms for exploiting small or short-term market efficiencies.

Learn: Top 3 Intraday Trading Strategies

Pros and Cons of Intraday Trading

In Intraday Trading, the positive impact is that the stock prices which not get affect when there is any sudden or overnight negative news in the market. This news can be on the economic and some earnings reports exposure as the stock prices will reflect the change before the market opens or after the market closes.

Intraday Trading also let you use the different orders while trading, like stop-loss and many more orders. Stop-loss orders make you stop at a prize to minimize your losses from a long position in the trading. Another feature is that you can use the margin for buying a lot in the trading and offers a high range of leverage.

If you will get more sweets then you will also get some problems with that so, in everything, there is some pros and cons likewise in this trading there are some negative impacts also which includes as the commission increase while you do more trading like very frequently and also it vanishes some profits that you won in the trading.

Pros

* If you use stop-loss, you can prevent yourself from the losses in the long positions.
* In this you are offered a high level of leverage for buying or selling the stocks on the margins.
* Positions are unaffected due to the risk of any overnight news which might affect the price before the market opens or after the market closes.
* By doing more number’s of trades during your trading it will let you learn more things and also increases your experience.

Cons

* Some assets do not have the feature to use the limits in the stock market, like the mutual funds.
* If you are doing frequently buying and selling trading in the stock market it will cost you more commissions and takeaways your profits.
* If you used margin for purchasing the stocks and if the discipline is not maintained then you can generate loss very quickly.
* In this trading, you will not get sufficient time for booking the profit before the opportunities get out.

Requirements for Intraday Trading

I. To have a Demat account
II. To get full knowledge about the market
III. To use a perfect system for trading
IV. High-speed Internet services
V. To work with discipline

Points that are required for Intraday Trading

  1. Select stocks that have high liquidity or are easy to sell
  2. Select stocks that have high trading volume
  3. Take expert advice
  4. Keep yourself updated with the stock market news
  5. Use the stop-loss strategy to save yourself from losses
  6. Avoid trading in penny stocks
  7. Analyze before doing the trade
  8. Go for the stocks that are sensitive to news

About Us

In this blog, you will find all your solutions regarding the basics things that should be necessary for intraday trading. You need to seek advice from an experienced guide or mentor if you are the beginner in the intraday trading. By this blog, you will get the clarity and concept of the advantages and disadvantages of the intraday trading. Trading Fuel provides various blogs on the stock market and there are many blogs updated for the intraday trading. We provide everything in our site for educational purpose and no cost is charged. Further for any assistance, you can contact us through mails.

Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.