What is Intraday Trading?

Within a single day, intraday trading involves purchasing and selling stocks. To put it simply, stock purchases and sales have to take place before the market closes.

Regardless of how your stock performs, you must square off your position before the market ends if you want to earn a profit as an Intraday trader.

If you want to know how to make money in intraday trading, then you can read our article.

Advantages of Intraday Trading

• Margin Facility

Trading intraday gives you the option of trading with more than your capital by giving you a margin facility. A trader can buy stocks worth more than their capital, and the broker will cover the difference.

Traders can now buy stocks they were previously unable to afford by taking advantage of this facility. By leveraging his position in the market, he gains an advantage over his competitors.

Taking no risks overnight

The intraday trading model ensures that a trader's stock price will not be affected by overnight news, as all transactions must be settled within a single trading day.

The short time frame of this trading method allows traders to book profits quickly from price fluctuations since capital is only locked up for a short period of time.

• Benefit from short-term market volatility

You may be able to book profits in a short period of time if you are an experienced trader and use Intraday trading strategies. If you aren't an experienced trader, you may not be able to use these strategies.

You also need to know the difference between intraday vs delivery. Check out our article.

Disadvantages of Intraday trading

• Riskier proposition

Oftentimes, the stock market fluctuates up and down quickly, and intraday transactions must be settled before the market closes, which leaves you with less time to profitably settle your positions.

You may incur losses during the day if the market is against you throughout the day, which could get severe if your exposure is high.

• Requires Constant Tracking

Intraday trading requires constant monitoring and tracking of your stocks. Tracking stocks continuously during intraday trading is an important part of following their price movements.

• Volatility

As a result of the higher volatility of 5-minute or 30-minute charts compared to monthly charts, trading on long-term charts is easier.

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