The word ‘Intraday’ means ‘occuring within the course of one day’. This type of trading which involves the movement of equity, shares, stocks, index futures, index options, and any significant commodity within the same day, building upon the advantages of price moves throughout the day is known as Intraday Trading. Furthermore, intraday trading calls give the recommendations to either buy or sell a financial instrument (equity, shares, stocks, index futures, index options) after having a deep reflection on technical data points where the positions have to be inserted or deleted on the same trading day. Intraday is often used to call attention to the new highs and lows of a commodity up for trade. For example, ‘a new intraday high’ refers to a commodity that has reached a relatively new higher market value during a trading session. This can also be equal to the closing price for some cases.
Traders involved in intraday trading keep a close track of intraday price movement by making use of graphical representations and real-time charts in order to build a strategy and maximize their benefits during the short-lasting price fluctuations. A technique called the Square Off is majorly used by the intraday investors to reverse the position and book profit or loss.
Consider an example where a trader buys 150 shares of Facebook Inc on some given date at Rs. 1500 around 10 am. The trader then sells these 150 shares on the same day at around 2:30 pm at Rs. 1530. In this situation, the trader is squaring off his position in the given trading session and is generating a profit of Rs. 30 per share. With a total of 150 shares, the trader has made a cumulative profit of Rs. 4500. This is a classic example of intraday trading. Just as a coin has two sides, Intraday Trading too has a lot of advantages and disadvantages associated with it.
Having a practical approach and focussing on the damages that can be caused by Intraday trading is highly imperative to carry out a decent trade.
After considering varied factors linked to Intraday Trading, here are some unique tips and strategies for all the enthusiastic amateur and experienced traders.