May 21, 2024

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5 Things You Must Know About Intraday Trading

Intraday Trading


The majority of us are drawn to intraday investing. By the end of the day, after opening an investment in the morning, you have collected your profits. You can accept positions that are a multiple of your available funds without having to be concerned about demat or delivery. 

Contrary to popular belief, intraday buying is more challenging than it first appears. Before engaging in intraday trading, you must understand the secrets of the trade. There are a few things to know that can help efficiently conduct intraday trading in the share market.

What is Intraday trading?

Buying and selling securities during the same trading day is known as intraday trading. In this case, stocks are believed not to invest but rather to generate profits by capitalising on the fluctuation of stock indices. To benefit from stock trading, price fluctuations in stocks are thus taken advantage of.

For intraday dealing, a trading account on an online platform is used. You must make it clear in your orders that they are for intraday trading when you are dealing intraday. It is also referred to as intraday dealing because the charges are summed off before the trading day ends.

5 Things to know about Intraday training;

1. One-Click Income

Unlike long-term assets, intraday trading allows for almost immediate cash flow. The profit or loss from your trade will be displayed right away in your trading account, based on your exit strategy and performance. You can decide whether to withdraw the earnings by transferring them to your bank account or whether to reinvest them in your trading capital account.

2. Generate Revenues in Bear Markets

One significant benefit of daily trading is that you can still profit during a downward market. Instead of holding onto a specific asset, you may buy and then sell it to make a profit. Thus, you can benefit from both rising and falling markets. This benefit typically is offered for something other than investment choices.

3. Delivery vs. Intraday trading

During intraday trading, you must sell the stocks before the market ends on the same day. There are two possible results if you still need to. Some online trading platforms charge a brokerage fee and convert intraday trades if not sold on the same day. Others simply square off your trades at the market price throughout closure time, even if you are losing money, and regrettably, you must take the losses.

4. Trading Technique

Buying and selling your stock positions during the same trading day is known as intraday dealing. As a result, traders profit from price swings that occur during market hours. If a trader anticipates a price increase throughout the day, they would first purchase a large number of securities before selling them at a later point. The opposite, known as short-selling, is also possible. Traders would short-sell in a declining market to profit from it. They borrow shares during this time and trade them on the market. The traders purchase shares at a lower price when the price drops as needed, and then they give the shares back to the lender.

5. High risk

Day traders face significant risks because they exploit the volatility. Compared to the risks incurred by a long-term stock investor, this is much higher. Because of this, intraday dealers are frequently speculators who are eager to take significant risks. They frequently use margin trading to carry out high-value transactions costing lakhs and crores of rupees. However, intraday traders can also generate exceptional profits (use Cover Orders and Bracket Orders to benefit from the high margins offered by Upstox).

Tips for intraday trading;

For intraday trading, it is advisable to search for liquid shares. It is preferable to choose large-cap shares because the trader needs to square off with their holdings at the end of the day. If not, you could be able to keep the stocks because of insufficient trading activity. Here are a few more intraday trading pointers and techniques;

  • Making use of the Stop Loss
  • Specify your goals.
  • Research
  • Know when to leave

Intraday trading is conducted to make a quick return rather than investing.

Moving Average, Bollinger Bands, Relative Strength Index, and Momentum Oscillators are common tools that show to be beneficial for traders. It is best to stay away from risky commodities. Investors should keep an eye out for stocks that are linked with important industries with the help of the Share Market app download as well. Whether a trader is a beginner or an expert, research and pattern monitoring are essential.