BAJAJ BROKING

Notification close image
No new Notification messages
card image
Smartworks Coworking Spaces IPO is Open!
Apply for the Smartworks Coworking Spaces IPO through UPI in just minutes.
delete image
card image
Start your SIP with just ₹100
Choose from 4,000+ Mutual Funds on Bajaj Broking
delete image
card image
Open a Free Demat Account
Pay ZERO maintenance charges for the first year, get free stock picks daily, and more.
delete image
card image
Trade Now, Pay Later with up to 4x
Never miss a good trading opportunity due to low funds with our MTF feature.
delete image
card image
Track Market Movers Instantly
Stay updated with real-time data. Get insights at your fingertips.
delete image

Intraday Vs Positional Trading: Which One Should You Prefer?

The stock markets have become one of the most sought-after avenues to make profits. Among the numerous strategies aimed at maximising wealth, two commonly used strategies are intraday and positional trading. Here is a detailed analysis of these two strategies along with the critical features of intraday vs positional trading.

Intraday vs Positional trading

While intraday and positional trading strategies exploit profit potential in the stock markets, intraday trading does so by trying to capture the maximum profits during the day. However, positional trading requires investors to hold on to their positions for a more extended timeframe. Since intraday traders do not carry forward their positions to the next day, they are exposed to a lesser risk than positional traders, who hold their positions overnight. Both these strategies can help in cultivating profits or creating losses. Positional trading may backfire if you have bad timing and invest in the wrong stock. Moreover, intraday trading may generate losses if you do not have stop-loss or profit targets.

Additional Read: Positional Trading Strategy

What is intraday trading?

Intraday trading refers to buying and selling securities on the same day. Intraday traders seek to capitalise on small profit-making opportunities throughout the day and close their positions by the end of the trading day.

What is positional trading?

Positional trading refers to the strategy wherein traders initiate their positions for a longer timeframe, which spans from several weeks to months. In positional trading, the trader typically has a long-term view of the stock.

Advantages of intraday trading

Given below are some of the critical advantages of Intraday Trading.

  1. A regular source of income

    Although intraday trading carries significant risk, trading daily for a few hours generates a steady income.

  2. Risk

    One of the most critical benefits of intraday trading is that the investment is not exposed to overnight risk. Intraday traders square off their positions before the end of each trading day. As a result, a drastic turn of events overnight does not influence the trader’s portfolio.

  3. Returns

    Intraday trading is known to generate monumental returns. Traders can take advantage of rising stock prices in bullish markets or practise short selling in bearish markets.

  4. Lower commission charges

    Brokers charge nominal commission charges for intraday traders. The brokerage fee on intraday trading is typically one-tenth if standard trading is undertaken.

  5. Liquidity

    Intraday trading requires trades to settle each day. As a result, the investor’s capital does not get blocked.

  6. High leverage

    Brokers typically provide high leverage to intraday traders, which helps in enhancing their profits.

Disadvantages of Intraday Trading

Although intraday trading is a powerful strategy to maximise profits, it carries some disadvantages.

  1. Time-consuming

    Intraday trading requires continuous stock market monitoring to assess profit-making potential.

  2. Insufficient time to formulate strategies

    Intraday trading requires traders to quickly assess the markets and place their trades immediately to capture profits. They do not get sufficient time to develop well-lit strategies.

  3. Not recommended for beginners

    Intraday trading requires you to quickly assess market trends and place trades instantly. The trader must carry some experience to analyse markets quickly while making efficient decisions.

  4. Ownership of shares

    In intraday trading, the ownership of shares is not transferred to the trader.

Advantages of Positional Trading

Here are some of the critical advantages of positional trading.

  1. Risk

    Positional trading is less risky than intraday trading or swing trading because the investment is made for a longer term.

  2. Analysis

    Positional trading can generate more accurate results in finding the correct entry and exit points since it considers both fundamental and technical stock analysis

  3. Overnight fluctuations

    Some significant events can happen overnight that can lead to an instant spike in the prices of securities. Since the trader’s position remains open overnight, they can benefit from such moves.

  4. Lower involvement

    Positional trading requires less involvement than other techniques such as swing trading or intraday trading.

Disadvantages of Positional Trading

Let us understand the disadvantages associated with positional trading.

  1. Long-term capital

    Since positional trading requires the trader to hold their investments for a longer period, the strategy requires long-term capital.

  2. Costlier mistakes

    The cost of making mistakes is higher in positional trading since stop losses are wider than in other trading strategies.

  3. Analysis

    Positional trading requires skills in assessing the fundamentals of assets, expertise that some traders may not possess.

  4. Sideways markets

    The benefits of positional trading are limited to upward and downward-trending markets. You cannot benefit from positional trading during sideways markets

Conclusion

Intraday and positional trading are excellent strategies for capturing stock market returns. However, selecting the most suitable strategy depends on factors such as your risk appetite, available capital, time horizon, trader’s skill set and level of commitment. Swing trading is another widely used strategy among traders attempting to cultivate profits from short-term market swings. An in-depth analysis of these strategies combined with a thorough understanding of day trade vs. swing trade can help you select the best-suited strategy.

Share this article: 

investment-card-icon

Value Trap

A value trap looks like a bargain but underperforms. Spot the signs, avoid common mistakes, and make smarter investment decisions with the right approach.

investment-card-icon

What is Impact Cost in Trading

Impact cost shows how market moves affect trade prices. Learn the calculation method and its significance in liquidity and trading efficiency for better execution.

investment-card-icon

What is Statistical Arbitrage- Strategies & Benefits

Statistical arbitrage uses quantitative strategies for market advantage. Understand how it works, its benefits, and challenges in this advanced trading approach.

investment-card-icon

Cash Trading

Cash trading involves buying stocks with full payment upfront. See how it works, its advantages over margin trading, and how it fits into smart investment strategies.

investment-card-icon

What is Overnight Trading

Discover what overnight trading is, its benefits, and how to place after-market orders (AMOs) in India. Learn about trading hours and strategies with Bajaj Broking.

investment-card-icon

What is Averaging Up in Stock Trading

Averaging up in stock trading involves buying more shares as prices rise. See how this strategy works, its benefits, and how to apply it for better returns.

investment-card-icon

MetaTrader 4 (MT4): Features, Benefits & How to Use It

Want to know how MetaTrader 4 can help in trading? See the top reasons why traders prefer MT4 and how it boosts speed, accuracy, and overall trading control.

investment-card-icon

Settlement Price in Trading

Get a clear idea of what settlement price means with real examples and market insights. Read how it's calculated and used in various financial segments today.

investment-card-icon

What is the Nifty CPSE Index

Get insights into the Nifty CPSE Index, its calculation method, stock performance drivers, benefits, risks, taxation aspects, and future outlook—all in one guide.

investment-card-icon

What is Maintenance Margin

Trading on margin? Maintenance margin is key to managing risk. Find out what it means and how it stands apart from regular margin accounts in this article.

Disclaimer :

The information on this website is provided on "AS IS" basis. Bajaj Broking (BFSL) does not warrant the accuracy of the information given herein, either expressly or impliedly, for any particular purpose and expressly disclaims any warranties of merchantability or suitability for any particular purpose. While BFSL strives to ensure accuracy, it does not guarantee the completeness, reliability, or timeliness of the information. Users are advised to independently verify details and stay updated with any changes.

The information provided on this website is for general informational purposes only and is subject to change without prior notice. BFSL shall not be responsible for any consequences arising from reliance on the information provided herein and shall not be held responsible for all or any actions that may subsequently result in any loss, damage and or liability. Interest rates, fees, and charges etc., are revised from time to time, for the latest details please refer to our Pricing page.

Neither the information, nor any opinion contained in this website constitutes a solicitation or offer by BFSL or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.

BFSL is acting as distributor for non-broking products/ services such as IPO, Mutual Fund, Insurance, PMS, and NPS. These are not Exchange Traded Products. For more details on risk factors, terms and conditions please read the sales brochure carefully before investing.

Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

[ Read More ]

For more disclaimer, check here : https://www.bajajbroking.in/disclaimer

Our Secure Trading Platforms

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

Bajaj Broking App Download

10 lakh+ Users

icon-with-text

4.2 App Rating

icon-with-text

4 Languages

icon-with-text

₹5600+ Cr MTF Book

icon-with-text
banner-icon

Open Your Free Demat Account

Enjoy low brokerage on delivery trades

+91

|

Please Enter Mobile Number

Open Your Free Demat Account

Enjoy low brokerage on delivery trades

+91

|