Intraday trading (also called day trading) is the practice of buying and selling financial instruments—such as stocks, options, futures, or currencies—within the same trading day. Traders close all positions before the market closes, so they do not hold them overnight.
Example
- You buy 100 shares of a stock at $50 at 10:00 AM.
- The price rises to $52 by 2:00 PM.
- You sell the shares the same day.
- Profit = ($52 − $50) × 100 = $200 (before fees and taxes).
Key Features
- Short-term trading: Positions last minutes to hours.
- No overnight risk: Trades are closed before the market closes.
- High frequency: Traders may make multiple trades per day.
- Technical analysis: Often relies on charts, price patterns, volume, and indicators.
- Leverage/Margin: Some traders use borrowed funds, which increases both potential profits and losses.
Advantages
✅ Opportunity to profit from daily price movements
✅ No exposure to overnight market news or gaps
✅ Potential for frequent trading opportunities
Risks
⚠️ High risk of losses
⚠️ Requires significant time, discipline, and market knowledge
⚠️ Trading costs and taxes can reduce profits
⚠️ Emotional decisions can lead to poor outcomes
Common Intraday Strategies
- Scalping: Many small profits from tiny price moves.
- Momentum trading: Following strong price trends.
- Breakout trading: Trading when price moves above resistance or below support.
- Reversal trading: Betting that a trend will change direction.
If you’re new to trading, it’s generally wise to start with a small amount of capital, learn risk management, and practice with a demo account before risking real money.