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All You Need To Know About Intraday Trading

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January 24th, 2022   |   Updated on March 21st, 2022

Intraday Trading is also referred to as Day Trading. Many people think intraday trading is similar to regular trading, but they are wrong.

Intraday trading is entirely different from trading not only in terms of buying or selling particular stocks, but also in terms of profit and trends view. If you want to make profits in Intraday Trading, you need to have the best indicator for intraday trading.

Intraday trading is something that should only be practiced by the people who can bear the risk and has sufficient time to invest in research of the market trends and trades.

If you are planning to do such trading, you must first get a good understanding of the technical analysis and trends of the market.

What Is Intraday Trading

Day Trading is done on online platforms and the practice of buying and selling stocks in one day. For instance, if you are buying the company’s stocks for intraday trading, you need to choose the intraday trading option in the portal and then proceed. This way, your portal will change the settings to sell the stock you bought on the same day before the market’s closure. The main objective is to earn profit and get heavy returns. But this does not mean that every time you will get huge profits.

Day trading is full of risks, and there is no certainty that you will only get profits. There is a 50-50 chance of profit and loss, so before taking your decision, think twice or even thrice.

Features Of Intraday Trading

While Day trading, the main objective is not to get ownership of the shares but to make huge profits by taking advantage of fluctuating prices during the day.

On every trading platform, you must specify the limit of your order beforehand; otherwise, it will set the values of stock automatically, according to the market closing price.

By specifying the intraday trading, you get the position on the stock purchased, and then you can quickly close it anytime within the trading hours.

Many investors take advantage of leverage. If you are a beginner, then you must be wondering what this leverage means.

When your broker lends you the money to amplify your purchasing power and increase the returns of their investment, it is leverage.

Experienced traders are well established in the trading field and have an in-depth understanding of the marketplace. Some skeptics say, go with your instincts, but this is not always the right thing to do.

The market is uncertain, and anything can happen, so sufficient capital, a good strategy, knowledge, and experience are necessary.

How To Start Intraday Trading

The very first thing you should do is open a Demat account, and if you are already an existing account holder, you can do trading using it, or you can create a separate Demat account.

After executing a trade, check Demat account balance to get an idea of your profits after tax deduction. Several platforms are there that offer trading with zero brokerage fees.

As per the Income Tax Act, this trading is treated differently from regular trading. This, to manage taxes, you can sign up for specific tools, which may help you in Day trading.

Rules For Intraday Trading

Such trading is not an easy game, and it includes lots of rules and tricks that you should know before starting to invest. To gain huge profits and minimize losses, you can follow the below-given rules.

  • Never trade if there is a volatile market. If investing in such a market, you will mostly spend your time managing stop losses.
  • First, identify how much you can bear the losses, and according to it, protect your capital.
  • Stop loss is necessary, and one should never trade without applying it, especially in intraday trading.
  • Set your profit target based on risk-return trade-off. As profit is the primary concern of the intraday traders, you must set the profit targets maximum of your stop loss.
  • Know and research thoroughly about the company you are trading. Keep all the updates and follow the technical analysis other than fundamental analysis.

These were the rules and significant facts you must know before practicing intraday trading. Never panic about the losses, and don’t make big decisions in a hurry. Analyze the stats properly and then invest.