4 Key Benefits of Intraday Trading

Listen to our Podcast: Grow your wealth and keep it secure.

0:00 / 0:00

Intraday trading is a necessity for professional traders and a lure for newbie traders and investors in the stock market. The advancement of the Internet has provided us with easy access to information like charts and technical analysis, leaving people to wrongly assume that it’s as easy as purchasing and selling in a normal stock trading scenario. The risks outweigh the benefits if done without understanding various market makers in intraday trading such as sentiments and technical indicators.

However, the scenario changes if you are an experienced trader with a finger on the pulse of market movements. While there is a significant risk involved with intraday trading, there are also advantages of intraday trading for such a trader. With the right intraday trading app , experienced traders can leverage market opportunities and execute trades swiftly to maximize their profits.

What are the four benefits of intraday trading?

In trading parlance, intraday trading or day trading refers to when positions are opened and liquidated on the same day.

The four main benefits of intraday trading are:

  1. No Overnight Risk

    A noteworthy aspect of the stock market is the overnight risk. Overnight risk refers to when there is a risk that a stock’s price may decrease/increase the following day while you are still holding it in your trading or demat account.

    Since traders start the next day with no open positions, they eliminate the risk of overnight factors influencing their trade.

    In day trading, since the trader must terminate the position before the conclusion of the trading day, the profitability is guaranteed to be unaffected by any events or movements that occur during this time.

    Therefore, any stock market news, whether it is local or worldwide - such as after trading hours announcements or US markets in the evening, will not jeopardise your gains on that specific day.

  2. Potential to Earn in Bear Market

    With the use of appropriate trading tactics, intraday trading can produce significant gains for traders.

    In a booming stock market, capital appreciation is simple to attain. However, intraday share traders utilise the short-selling strategy in unfavourable market circumstances to generate profits as well. This is the reason why serious traders use day trading to grow their capital and earnings are redirected to invest for the long term. Yet, intraday remains the base for most expert traders.

  3. Quadruple Leverage

    Intraday traders frequently use leverage to boost their profits. In the stock market, a broker assesses your shareholding history and cash position before approving a margin amount. The amount of margin might range from four to 10 times the amount of cash in your trading account.

    High leverage being an advantage of intraday trading will thus help increase the potential to earn more money, which is why it is one of the significant intraday benefits. You can start day trading with low capital as well, and take advantage of leverage if you are confident in your analysis.

  4. Great Opportunity to Learn

    Intraday undoubtedly provides a valuable platform for learning, examining, and using numerous trading methods. You can experiment with the tactics to see which one works best for you. This is also an intraday trading advantages. It can be a good learning platform for newbie traders looking to have a quick learning curve in the stock market. Nothing teaches you like failures! It is important though to restrict your capital in the initial days of your day trading journey, so that you do not expose yourself to significant losses.

Conclusion

Although numerous benefits of intraday trading exist, newbies must proceed carefully and cautiously. Knowing your risk appetite, conducting the necessary research, and having the patience to see your trading plans through are essential for being a successful trader.

The trading adventure will go more smoothly if you have the backing of a professional broker with access to the correct information and cutting-edge charting tools, all being the advantages of intraday trading.

Share this article: 

FAQs

Can I open multiple demat accounts?

Answer Field

Yes, you can open multiple demat accounts but only under the below conditions:

  • You can open only one demat account per DP using the same PAN card.
  • You can open multiple demat accounts with different DPs using the same PAN card.

No results found

investment-card-icon

Exchange Traded Funds (ETF) - Meaning And How Do They Work?

Trading accounts facilitate market access, enabling buying, selling, and managing of shares for investment growth, trading and diversification.

investment-card-icon

Difference Between Online Trading and Offline Trading

Difference Between Online Trading and Offline Trading in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

Benefits of Online Trading

Benefits of Online Trading in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

What is Day Trading

What is Day Trading in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

4 Key Benefits of Intraday Trading

Discover the advantages of intraday trading, such as risk mitigation, profit potential in bear markets, leveraging opportunities, and the platform for continuous learning.

investment-card-icon

Momentum Trading

Momentum Trading in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

Short Covering and Short Squeeze

Short Covering and Short Squeeze in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

How to Calculate Stop Loss in Intraday Trading?

Calculate Stop Loss in Intraday Trading? in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

Day Trading for Beginners

Day Trading for Beginners in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

investment-card-icon

What is range trading?

What is range trading? in our Knowledge Centre. Stay informed with expert analysis, tips, and guidance.

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking Mobile App for effortless investing and trading

Bajaj Broking App Download

6.5 Lac+ Users

icon-with-text

4.1 App Rating

icon-with-text

4 Languages

icon-with-text

₹ 3500 Cr MTF Book

icon-with-text