What is Intraday Trading

August 30, 2009

Intraday trading is a method of trading where you buy and sell the stocks within the same day. You won’t carry the position for the next day. This is also called as day trading. If you know how to do intraday trading, you can make huge money out of this at the same time if you don’t know the working of intraday trading you might make huge loss also. You can also take assistance from experts in selecting the stocks to trade.

Intraday trading looks to be one of the simplest and most rewarding trading methods. If you want to be a successful intraday trader, you have to be very fast and quick. Intraday trader should be very keen and alert always. Strategies for Intraday Trading range from holding a position (buy/sell) for a fraction of minutes to holding until the end of the day. Basically markets are very dynamic in nature. There is no tailor made strategy that fits for all. You need to learn and analyze the strategy and apply whatever fits for the moment. You need to consider a broad range of information to determine which strategy will best suit for the market for the moment. This is where the importance of knowing how to do intraday trading is used. Intraday Trading if done correctly can be a very good source of regular income. This article will help you in understanding the basics of intraday trading.

Following are the major advantages of Intraday Trading
1] Trading opportunities are very high
2] There are thousands of stocks to choose from
3] You can cut losses very quickly by fixing stop loss
4] Helps to earn huge money in a very short period of time
5] There is no overnight risk if a major piece of news hits your market after the close.

Following are the major disadvantages of Intraday Trading
1] It is very risky
2] Possibility of losing capital is very high
3] You will miss the benefits of long term investments
4] Generally profit are smaller because intraday swings are shorter
5] Expenses are higher because of more frequent commission or brokerage.
Read How to become a Successful Day Trader?

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