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Intraday Trading

Candlefocus Editor
Intraday trading, also known as day trading, is a trading strategy that involves placing trades on stocks, derivatives, or other financial instruments that can be closed within one business day. The objective of intraday trading is to capitalize on small price movements in the market and make a profit in a very short period of time. Traders monitor the stock charts and rely on technical indicators to enter and exit their trades in the shortest amount of time possible. With limited capital and no interest in accumulating positions long-term, intraday traders take advantage of those opportunities offered by the stock market.

Intraday traders capitalize on the daily fluctuations in the equity markets, primarily focusing on buying and selling a particular stock multiple times in a single day. To accomplish this, traders will use algorithmic trading or manual trading to craft stock trades based on certain conditions of the stock. Intraday traders must monitor their positions carefully and exit as soon as conditions reach their predefined goals to avoid large losses.

In addition to buying and selling single stocks, intraday traders use a variety of trading strategies. Scalping is an intraday trading strategy that involves taking small profits in quick succession to maximize gains with minimal risk. Range trading is also a popular strategy used by intraday traders; in this strategy, traders buy a stock when it hits a certain price level and then sell it shortly afterwards before it dips too low. Finally, news-based trading is another intraday strategy where traders watch the markets for news stories that could impact the stock prices, then buy or sell based on the news.

Intraday trading is not for everyone, as it involves a great deal of risk and discipline on the part of the trader. Since intraday trading strategies depend on rapid trades and large returns, small fluctuations in the stock price can quickly take a trader’s capital. For this reason, intraday traders are typically professional traders with extensive expertise in trading markets and a passion for making quick profits. Fortunately, there are online brokers and trading platforms to guide novices and make intraday trading easier and more profitable.

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