What is Intraday Trading?
The word ‘Intraday’ means ‘occuring within the
of one day’. This
type of trading which involves the movement of equity, shares, stocks, index
futures, index options,
and any significant commodity within the same day, building upon the
throughout the day is known as Intraday Trading.
Furthermore, intraday trading calls give the recommendations to either buy
or sell a
instrument (equity, shares, stocks, index futures, index options) after
deep reflection on
technical data points where the positions have to be inserted or deleted on
Intraday is often used to call attention to the new highs and lows of a
for trade. For
example, ‘a new intraday high’ refers to a commodity that has reached a
new higher market
value during a trading session. This can also be equal to the closing price
Square off in Trading
Traders involved in intraday trading keep a
track of intraday price
movement by making use of graphical representations and real-time charts in
strategy and maximize their benefits during the short-lasting price
the Square Off is majorly used by the intraday investors to reverse the
book profit or
Example of Intraday Trading
Consider an example where a trader buys 150
Facebook Inc on
some given date at Rs. 1500 around 10 am. The trader then sells these 150
the same day at
around 2:30 pm at Rs. 1530.
In this situation, the trader is squaring off his position in the given
session and is
generating a profit of Rs. 30 per share. With a total of 150 shares, the
cumulative profit of Rs. 4500. This is a classic example of intraday
Just as a coin has two sides, Intraday Trading too has a lot of advantages
associated with it.
Advantages of Intraday Trading:
- No overnight risk as the position is not affected by any negative
- Flexibility to trade even with a limited capital base.
- Provides an opportunity to work from anywhere at your comfort.
- Allows you to utilize tight stop-loss orders
- Meager brokerage with many brokers giving as low as one paise for
- Perfect opportunity for traders to learn more and access
Disadvantages of Intraday Trading:
Having a practical approach and focussing on
damages that can be
caused by Intraday trading is highly imperative to carry out a decent
Increased degree of risk - As it is a short-term trading, the
abilities of the
trader should be highly polished. Any wrong decision can lead to
losses within a span
Quality and Quantity - Traders are generally inclined towards
more number of
profitable transactions while the investors focus on the quality of the
Time Consuming - Demands a lot of time and energy from the
The trader must
not perform any other job or task simultaneously.
Requires knowledge - Intraday Trading needs the trader to have
amount of knowledge
about the various trading strategies and technicalities.
Patience and Perseverance - Creating wealth through this
requires a lot of
waiting instead of indecisive buying-selling and requires strict
strength to pull off an efficient trade.
After considering varied factors linked to Intraday Trading, here are
unique tips and
strategies for all the enthusiastic amateur and experienced traders.
Tips and Strategies for Intraday Trading:
Tip 1- Have Persistence In Gaining Profits:Patience is the key
intraday trading. Do
not be in a hurry to buy and sell commodities to raise profits and try
through the price
movements for the entire day’s session.
Tip 2- Less is More: Focussing your strategies on fewer stocks
and profitable than to focus on too many stocks at the same time. Thus,
interests in a variety of stocks.
Tip 3- Gracefully cut the losses: If the outcome is not what
expected, settle in
and exit the trade using the stop loss principle, keeping in mind the
and loss that you
are ready to bear.
Tip 4- Try not to become an Investor involuntarily: If the
has not given the
anticipated result, do not let it turn into an investment involuntarily.
whole idea behind
intraday trading is to bring profits to reality, with no open positions
end of the
Tip 5- Be Emotionally Intelligent: Technical analysis and
are secondary keys
to this trading. Intraday Trading wants you to be emotionally stable as
quite demanding on
the nerves. Sometimes, one can benefit a lot by paying heed to the
squaring off offers a major relief. Focus on this part
Tip 6- Strategize: Make sure that you plan out the execution of
trade in such a way
that you get maximum profit and fewer losses. Focus on analyzing and
watermelon with a
lesser number of seeds.
Tip 7- Evaluate your mistakes: If you incur losses continuously
period of time,
then sit back and ponder over the mistakes that you are making. Make
try to find out a
reason or a pattern behind the failure. This will definitely increase
Tip 8- Have Realistic Goals: With predefined entry and exit
set a limit to the
amount of risk that comes with each trade. Having a strategized goal
mean that it will
lead to profit always, however, it should give you a calculated ratio
loss that does
not hurt you in the long run.
Tip 9- Do not buy in on margins: Buying in on margins means
borrowing capital from
a broker to carry out a trade. This can be quite detrimental to your
one’s own capital to buy stocks is the only intelligent way to make a
relationship is quite parasitic in nature. If the client will prosper,
broker will fail.
Tip 10- Health is the biggest wealth: It is very crucial to
yourself if you
are active in intraday trading. Take short breaks and relax your mind in
to avoid undue
pressure in the race to make profits.
Who Should Engage in Intraday Trading?
Basic Capital Requirement: Having enough liquidity in account
and brings out a
sense of security if you are involved in intraday trading. Individuals
can buy multiple stocks at the same time whereas those with a limited
think of making
larger profits through smaller inputs by intraday trading. These people
can generate profitable trades by having the right mindset and
Personal Factors: Intraday Trading is for those individuals who
to gain a profit
on daily basis and want to maintain a stable portfolio. Participants
require certain money
over different time frames with anticipated return rates, and compunding
want to sit for
Availability of Time: Every day at Intraday trading is a new
requires one to judiciously learn new trends, analyze, open positions,
monitor progress. For
a person who is engaged full time in a demanding profession, or business
be the right
fit for Intraday trading. This trading has tremendous profits to offer
dedicate themselves with a lot of risk-taking abilities and