Intraday trading (within the day trading) describes the business activity carried out by an individual or trader within a certain day's market hours. The main goal of intraday trading is to identify stocks, commodities, ETFs, derivatives, currencies etc that move up or down and thereby take the benefit of profit or risk of loss during the day.

The market is divided into two categories by intraday traders: buy and sell positions. They have the option to buy in the morning, sell prior to the market closing, or sell in the morning, buy prior to the market closing. The momentum and volatility of equities are advantageous to intraday traders.

When a trader believes that a stock will increase, they buy low and sell high. However, if a share is anticipated to decline, a trader is more likely to short sell, which simply means sell high and buy low.

It goes without saying that intraday trading demands a trader to have a keen feel of how the market could perform and take appropriate response. In intraday trading, regardless of profit or loss, the trader must close off the position the same day before the market closes.

Pros or advantages of Intraday for an intraday trader includes-

·       In comparison to investments, intraday trading calls for a lower initial capital.

 

·       An intraday trader need not have to wait for long periods of time to get or make significant profits.

 

·       When the stock market is highly volatile, the intraday trader can make more money.

 

·       The intraday trading does not require locking up the money/investment for a lengthy period of time. The intraday trader can use this to have money to engage in other frequent trading.

 

·       The trading capital can be heavily leveraged. The availability of this leverage varies from trader to trader.

 

·       Day trading has lesser risks and as such the intraday trader can usually be long and short at the same time if he or she keep at least five minor positions. This suggests that at least a portion of the portfolio will be profitable.

Cons of Intraday Trading

·       There is a chance of losing money more quickly while making money more quickly.

 

·       The intraday trading might have psychological effects in case the intraday trader has a string of successful transactions or if losing. Health-wise, this could be detrimental.

 

·       The performance as an intraday trader becomes challenging the instant the trader begins to disregard his/her trading schedule and trading plan.

 

·       Intraday trading through WhatsApp groups may be detrimental and as such the intraday trader must learn to use charts, comprehend structures, and independently place trades in this situation.

An intraday trading is suitable for a person who possess a sharp sense of how the market may behave and is able to take action accordingly.