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Intraday trading or day trading, is the buying and selling of property and other financial tools within the same day. In intraday trading all positions are doubled before the market closes with no modification in ownership of shares as a consequence of the trades.
Is Intraday trading is profitable?
Obviously, intraday trading is all about bringing forth small gain with numerous numbers of trades. One way the traders can reduce the losses is to wait for the right time to trade instead of trading at every move in the stock’s price. Never wait to generate huge profits in just trade; instead plan multiple trades and earn small profits.
Safe or Not?
Intraday trading put forward high returns on investment, on the other hand high returns comes with high risks. Intraday trading is not certain, especially for newbie. Even though there are no overnight risks, nevertheless, there are high risks due to the extreme instability of the market.
Money pit in intraday:
One of the primary reasons traders shed money in intraday trading is due to anxiety. In the stock markets when you fear, you actually support other trader who does not alarm. Profits always flow from the frighten trader to the trader who does not panic.
Convincing Factors Of Day Trading:
Very less capital requirement and high marginal available makes intraday trading beneficial. One can even buy securities without paying full amount. Without any overnight risks your investments get accomplished on the same day.
Benefits of Intraday Trading:
- Ends the Overnight Risk
- Daily income
- Provides Higher Returns
- Quadruple Leverage
- Great Opportunity to Learn
Commonly youngsters aged from 21 to 40 are attracted to day trading, thinking of making money in quick time. As it appear to be simple, easy, and lucrative. Yet these traders are to be expected to suffer failure, financial loss, and depression if day trading is not performed by professionals. Traders are advised to gain proper trading knowledge before they start the trading. Never ever try to forecast the market. Be methodical and stick to the fundamentals.
The key benefit of intraday trading is, it does not block your capital after the market gets exceed. Traders can easily review the trend of the market for trading. Nearly all traders who want to make money in short time or in a day, prefer intraday trading.
The foremost intraday strategies are:
- Type Risk Reward
- Swing Trading High High
- Arbitrage Low Medium
- Trading News Medium Medium
- Mergers/Acquisitions Medium High
Intraday trading is unpredictable compared to long term investments or even short term trades. In opposition to long term investments, any new market development could cause wild price fluctuation in addition to the inherent volatility of the stock.
Risks involved in intraday trading:
- High price fluctuations
- Emotional trading
- Technological slippages
- Lack of strategy
- Wrong exit
Risk management in intraday trading:
Here are some of the risk management factors to earn better returns.
- Plan your trades
- Prefer logic over emotions
- Plan your exit
- Choose the right broker
- Use the latest tech
- Determine support and resistance
A tradesman must know how to reduce risks. Whereas traders don’t have control over making returns, every trader can reduce loss making by systemizing an intraday strategy to be followed well in advance. Without a plan, guys make emotional decisions in the face of unfavorable developments, leading to more adversity.