What is intraday trading?
Posted by aarav badhe on May 27th, 2019
Intraday trading involves buying and selling stocks within the same trading day. Here the stocks are purchased, not with the intention to invest, but for the purpose of earning profits by harnessing the movement of stock indices. Hence, the fluctuations in the price of the stocks are harnessed for earning profits from the trading of stocks. Before getting into trading, investors should understand what is intraday trading, as it will be beneficial for gaining profits.
The difference between intraday trading and regular trade is it lies in taking the delivery of the stocks. In intraday trading, an individual squares off their positions the same day, where in regular trading gets settled over a span of days if not longer. So, an individual gets the delivery of the shares they bought while the shares the investor sold moves out of their demat account. In intraday trades, an investor will need to square off their position before the market closes. Thus, it is important that an investor chooses stocks which have enough liquidity for executing the trades.
An online trading account is used for the purpose of intraday trading, while doing intraday trading, an investor will need to specify that the orders are specific for intraday trading. intraday trading meaning is that orders are squared off before the end of the trading day, thus it is named like that. After an investor has understood what is intraday trading, investors can begin with the process of investing. Intraday trading is riskier than investing in regular stock market. It is important for the beginners to understand the basics of the trading so investors can avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing any type of difficulties.
Intraday traders generally face inherent risks which exist in the stock markets. The price volatility and daily volume are just a couple of factors which play an important role in the stocks picked for daily trading. Intraday trading deals with buying and selling stocks on the same day, during the trading hours which are stipulated by the exchange. The stocks are bought and sold in large numbers strategically with the intention of booking profits in a day. After completely understanding what is intraday trading, traders can generate profits easily. A strategy they can implement is to buy when the stock moves above the opening range high and sell when the stock moves below the opening range. The fluctuation of this range, known as the opening range. The fluctuations of this range is taken as support and resistance.
7 tips for investors who are going to begin with intraday trading are listed below:
Author bio: Aarav Badhe is a finance advisor with over 12 years of experience in the investment industry. He loves researching and writing on varied investment topics. In this article, he has given information on what is intraday trading. He has explained what is intraday trading.
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About the Authoraarav badhe
Joined: May 27th, 2019
Articles Posted: 19
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