Intraday trading is one of the major and useful type in trading to mainly who want instant results within a day. Just know about intraday trading, Basics, it’s working followed by benefits and techniques…
The process of buying some stocks and selling them on the same day before the market closure is termed as Intraday Trading. In this trading pattern, the purpose will all be to get instant results without thinking about future savings or benefits.
Many traders, who monitor the price changes of stocks closing, do buy and sell their stocks on the same day to get a good margin in quick time. Traders have to confirm their items as Intraday Trading to the broker or else their stocks will be squared off or even converted to delivery.
Also read: Difference Between Demat and Trading Account
Instant decision making concept brings rise to Intra day Trading for easy money which can be loss or profit with marginal digits.
Intraday Trading Basics
This Trading is also called day trading, as the entire process of buying and selling of sticks by a trader will be on the same day. These might sound good but actually Intraday Trading is one of the riskiest trading techniques that are followed.
In most cases, the beginners who are new to the market can utilize these options of day trading and make quick decisions to see how marginal their profit or loss will be.
Also read: Stockbroker
Working of Intraday Trading
In Day trading, a trader does buy some stocks from a market broker and mentions them as Intraday. This makes the broker clear that the trader will be selling the stocks on the same day to the same company, before the market close time.
These market open time will be crucial for Intra day Trading, as the stock price might go up or it can even come down which is always tricky. Thus if stock prices increase, the trader will get their profit balance back to their account.
Also read: NSE Holidays
Benefits of Intraday Trading
Let us go through some quick benefits which a trader can enjoy by using the Day trading technique.
Marginal Income: in Day trading, the return with the buy and sell of stock will be marginal. These will be quick interest of income with having nothing much to lose but to have an alternative income source.
Low Commission Chargers: The brokerage in Intraday Trading is very low and the broker won’t put their fees high here. In regular investment Brokerage charges, taxes, service tax and more does eat all the profit. But whereas in Intraday Trading these are neglected.
Higher profit: for beginners Intra day Trading is best to increase their amount. As there are many positive chances to grow higher in day trading.
Liquidity: the amount invested in trading through Intra day Trading will not block. It can used for personal one at the end of the day. Thus blockage of amount through regular trading will not happen here.
Market Fluctuation: the fluctuation in the market will bring higher chances of profit with good digits under Intraday Trading. The investment strategy adopted in this situation will always make difference
Also read: NSE Pre Open
Intraday Trading Technique
This doesn’t always give bring profit, as stock price in the market will go high or low at any time. Thus following a few techniques will usually create a good profit in Intraday Trading.
Moving Average: there are some stocks whose average rate of growth observed to be changing daily in high value. Thus through the Moving average technique, the stock under these lines are to consider for the investment under Intra day Trading.
Bollinger Bands: The Bollinger Band technique does have Moving average, Upper Limit and lower limit charts which represent the price of a product. Thus these graphs will help you to make decisions on partial stocks. These are to select for Intraday Trading or not.
Momentum Oscillators: the price of stocks does depend on market situation and high volatility. These oscillators will let traders know if market price of the stock will increase or decrease in given time range.
Relative strength Index: Having a technical analysis of stocks can easily done through Relative strength index. These values will give you look of stability of the stock price in the market for a range of periods. Thus having these calculations will also bring you some profit through day trading.
- What are the Intraday Trading Indicators?
In Intraday Trading, the best indicator is Trend, Momentum, Volatility and Volume. Based on these four indicators the Intraday Trading will open. It will help traders to make quick decisions for day trading.
- What is the minimum amount to invest in Intraday Trading?
There is no fixed price in Intraday Trading. As one can start to increase with a lowest price of INR 5000. This amount can go high to INR 2, 00,000 in Intraday Trading. The rest of the task will depend on which stock the trader has used.
- What is the Difference between Delivery Trading and Intraday Trading?
If a trading done over a certain period of time, then it refers as Intraday Trading. If the chance of stocks done on the same day will refer as Intraday Trading.