Intraday Trade Explained
Intraday trading is a system where the stock trader trades in the market for a very short time during which he buys and sells the stock in one day.
This process is also known as day trading.
The main aim of the trader is to earn maximum profit from his trades in one day trade which is difficult in itself.
In the intraday trade the trader is never worried about the ups and downs of the market neither is he concerned about the recession, he would focus for his profit for the day, and how to earn it.
When we read this process is sounds easier than it is.
A trader has to maintain his balances so that he doesn’t have a risk of losing more than he has got.
When he enters this trade he needs to have a large amount of money to take up the day trade as this is the first rule of the market.
In the normal markets, we had a different type of trading ways, there were funds available to buy the stocks but intraday trade is different and follows different rules.
In the intraday trade, the trader has two types of stocks referred to as liquidity and volatility.
In this,
liquidity means that a trader can buy the stock or sell the stock making a profit at any time of the day, whereas volatility means the expectations that a trader has from its stock until the end of the day.
As per the bifurcations done by the trader, it is decided what best time would it be to trade in the market. The decision of the stock that in which category does it fall, is done by technical experts in this field.
The predictions are done by the way of charts or at times there are predictions done by a detailed study of the past and present balance sheets of the company.
The intraday trade is followed by many to earn money on a daily basis. But there are certain points if followed can be proved helpful; such as,
• Keeping a record of previous day’s trade, this helps the trader to have an idea of the ups and downs happened during the previous day.
• At times there is a sudden rise in the price this gives an idea to the trader that that particular share is currently in demand.
These are not the only points proved to be helpful, there are methods used by the trader, such as scalping which is a very popular method used.
In this type, the shares are sold as soon as they purchase making a profit.
There are many other methods such as purchasing the shares and then selling them again with the hope that they would reach the point where it makes a profit again.
As there are losses involved, Mainer times the trader opts for stop-loss limit, which means there is a limit placed for the trader till the amount he can risk and the selling of the shares do not go beyond that limit.
The intraday trade is a trade which involves profits and losses.
If the person is skilled in this type of trade and is aware of the market, this type of trade can be fruitful and at the same time profitable. If the idea of being the sole owner of business excites you, the intraday traders can be proved to be a good option.
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