Intraday trading in stock market is quick way of making profit , In stock market there are different types of investment plans , and these plans varies with investors choice and view .stock market is a place where you can make lot of money but one has to be focused and patient if you don’t know how to invest in share market you can check here
Today i will be discussing here about Intraday trading , before jumping into intraday trading we all know that trading is nothing but buying anything at cheaper price and selling it at a higher price in order to make profit .
Intraday day trading involves buying shares of any company or firm at a cheaper price and again selling it at relatively higher price to make a quick profit , but here you will have obligation to sell the stocks in same day before stock market close . even if you did’t sell it your position will be closed automatically by trading terminal if you trade using intaday.
Let us take an example : Suppose on monday stock market opens at 9:15 am in india , and i am thinking to make quick profit , so if i want to do intraday trade on monday , then i will have to buy stock on monday and sell it on same day i,e monday before 3:15PM (Time when stock market closes) .
Also read : You can easily do forex trading in india click here .
Why would some one want to do intday trading ? let us look some of the benefits of intraday trading :
intraday trading (advantages) :
1. Leverage ( Amount you can borrow from your broker )
First and foremost benefit of intraday trading is that you get lot of leverage ( leverage is basically kind of capital or financial support which your stock broker provide you during intraday trade )
What does that mean ? let’s say if your broker provide you 12 times (12x) leverage it means that you can buy 12 share of a particular stock at the price of one stock of the same stock .
ex : if my stock broker provides me 12x leverage . and i want to buy ITC stock , let’s say if ITC is trading at 125rs/share , so in 125rs/- i can buy 12 shares of ITC isn’t it amazing .
But there is a catch since it’s intraday trading you are bound to sell stock on same day whether you make profit or loss. Choose best stock broker in india that provides good leverage/exposure .
2. Quick Profit
Intraday trading can make you quick profit , how ? because you get lot of leverage and at the end of the day you sell the share’s so it can make you profit , but be very cautious in beginning when you learn to trade , always trade with less quantity practice first because it can also cause you loss .
3. Short selling (Sell before buy after) Only In intraday trading
Only in intraday you can first sell the stocks at higher price (shorting) and can but it again when the price drops down which will make you profit . but be aware this practice can only be done in intraday not in equity delivery or long term investment
1. Should have knowledge of technical analysis for intraday trading
To trade in intraday you need good knowledge of technical analysis , because you have to buy and sell the stocks on same day if you don’t have good grip on various factors of share market , higher chances are that you may end up making loss .
2. Stop Loss
2. To minimize loss you must always apply stop loss before entering into a trade but sometime market might behave as you expected after eating your stop loss this also an disadvantage
I Have shared an separate article about intraday trading tips which you can follow to avoid loss and boost profit
you should have knowledge of various other factors such as upper circuit and lower circuit , because you might stuck while shorting a stock and getting trapped in upper circuit .
if you didn’t understand above point it’s ok you might learn it after spending sometime in market