Intraday trading which is also known as day trading is a way of buying and selling stocks within a single day. This means traders should complete their transaction before the market closes. It is a popular choice for those who want to take full advantage of the short term price movements. As all the trades are settled in the same day, traders do not hold stocks overnight. This reduces risks that are linked to price change after the market gets closed for the day.
How Intraday Trading Works
Intraday trading involves buying and selling or selling and buying the shares in a single trading day. The traders try to profit with rapid but minimal price swings. Because they need to enter the trades ahead of the closure of the markets, the investors should keep tracking the stock prices regularly. Traders get dedicated instruments such as charts and notices in most platforms for quick thinking.
Benefits of Intraday Trading
Advantages of intraday trading:
- Rapid Gains: Since the trades occur within a single day, traders do not need to wait for long for probable gains.
- No Overnight Risk: Intraday trading, unlike normal investments in stocks, does not take risks that are a result of price fluctuations post-market hours.
- Less Capital Required: Certain brokers permit investors to trade using a margin, so they don’t have to put up a huge amount.
- Flexible Trading Options: Various stocks and markets are offered for traders, which provides more possibilities for trade.
Conclusion
Intraday trading is a fast paced method. It requires careful monitoring and the traders need to make quick decisions. It offers the traders a chance to earn profits in a short span of time without the risk of holding the stocks overnight.