Advantages of Intraday Trading
- Quick Profits: Intraday traders aim to profit from short-term price movements, potentially generating quick returns.
- Diversification: Multiple trades can be executed daily, allowing for diversification across various assets.
- Reduced Overnight Risk: Positions are closed before market close, minimising exposure to overnight market events.
- Liquidity: High trading volumes in intraday markets provide ample liquidity for entering and exiting positions.
Disadvantages of Intraday Trading
- High Risk: If trades go against the trader, rapid price fluctuations can lead to substantial losses.
- Stressful: Intraday trading requires constant monitoring and quick decision-making, which can be mentally taxing.
- Commissions and Fees: Frequent trading increases brokerage fees and transaction costs.
- Market Noise: Short-term price movements can be influenced by noise and speculative trading, making analysis challenging.
Conclusion
Intraday trading requires a higher degree of technical analysis expertise and market knowledge. If you plan to become a day trader, do your homework properly before starting. Research thoroughly, explore alternative trading styles, prioritise risk management, and gain a solid foundation. Trade with tactfulness and a well-developed strategy to navigate the fast-paced world of intraday markets.
Source /www.shiksha.com