What is Intraday Trading?
It is the most popular segment of the stock market, commodity market or Forex market. It is a day trading system. In this segment, investors have to earn profits in a very short time. You only have to trade during one day’s work. In this segment, you can make a profit only if your observations are very accurate on a particular stock, index, commodity or forex.
Suppose you think a stock can give a good movement today. You bought that stock and immediately sold the stock as soon as the stock moved. In this way, you made a profit in a short period of time. But there is another side to it. This trading system is very risky. Because there can be hundreds of reasons for the change in the price of a stock in the stock market. Your precise prediction in the stock market can go in the opposite direction at any time. Intraday trading is the process of making a profit in just one day.
It depends on your mastery how you are able to earn profit in this system.
Intraday trading is exactly like a vegetable seller. A vegetable seller buys vegetables from the big agricultural market in the morning at cheap prices and sells the same vegetables to the common people with his margin commission. Its purpose is that all the vegetables should be sold on the same day. Because vegetables can spoil the next day and it can cause losses in the vegetable business. The same principle applies to intraday trading as well.
What are the advantage of trading intraday?
- It is only a day trading arrangement and you do not have to worry about the next day. Because sometimes there is a big upsurge in the stock market, commodity market or forex market due to economic global events at night.
- Margin seems very low in intraday trading. You can buy stocks worth an additional 15 to 40 rupees for a price of just Rs 1. That is, the broker offers you additional margin. You can understand in simple language that one lakh rupees are available in your trading account, but you can buy shares, commodities etc. worth 15 to 40 lakh rupees for only one lakh rupees.
What are the disadvantage of Intraday trading?
- In Intraday trading, an investor has very little time available and trading accurately over a short period of time may not be successful at all times.
- Of course, intraday trading offers very high margins but it can also cause huge losses to an investor. The right decision in intraday trading can definitely lead to big gains, but we should also consider the other aspect of it and the second aspect indicates greater risk.
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