intraday trading why to do intraday trading day trading benefits advantage disadvantage

Why to do the Intraday Trading

Following are the major benefits in doing intraday or day trading

Advantages of Intraday or Day trading
1. For day trading or intraday trading you get margin on your capital amount. Suppose for example, if you have Rs.10, 000
    then you may get Rs.40, 000 extra amounts to do day trading. This is called Margin Trading. Margin amount depends on
    your brokerage firm.
2. Very importantly brokerage is less for intraday trading as compare to delivery trading
3. No risk of overnight holding. Suppose if you buy some stocks for delivery then there are chances that tomorrow market
    may go down but in intraday trading you are not bothered of what is going to happen tomorrow to any stocks.
    You have to buy and sell only on daily basis, no need to take any delivery.
4. Excellent returns in day trading if done properly and systematically.
5. As you have to pay the low brokerage so no need to wait to book huge profit. You can book very small profit and can do
    multiple trades in a day so that you can book good profit at the end of the day.

At the same time please take note of following disadvantages of intraday trading

Disadvantages of Intraday or Day trading
1. Its very risky - Only experienced traders can do intraday trading, if you are new to share market then you should avoid
    doing intraday or day trading.
2. Time limit in day trading - You have to square off your trade before market hours. Some brokers like ICICIdirect.com
    squares off your order automatically at 3.15 p.m.
3. Huge risk - If done without knowledge and experience then there are chances of huge loss.

What is Intraday Trading
Buying and Selling of stocks with less profit at multiple times in day is called as Intraday Trading.
Intraday Trading is done with very less profit and done multiple times in a day.

Basics of Intraday Trading
1. In intraday trading if you buy stocks in NSE then you have to sell those
    stocks in NSE only, you can’t sell it in BSE and vice versa.
2. Find out the brokerage rates for intraday trading from your broker. Try to go
    for less brokerage if you are planning for new demat account or else if your
    broker is charging more then search for other broker who is offering you
    less brokerage for intraday trading.
    Because in intraday trading you have to do multiple trades in a day with
    very less profit margin.
3. For faster entry and exit from the trade you may require faster internet
    connection. On dial up internet connection you may get delayed results for
    buying and selling.
4. Watching or reading news during market hours (9.55 a.m to 3.30 p.m) is
    very important and useful to day traders.

Who can do the Intraday trading
Basically intraday trading involves lots of risk, so it is always advised that only
experienced traders can go for intraday trading.
New comers - They should avoid intraday trading in the beginning, once they gain adequate knowledge in share market and understand all techniques and terms in intraday trading then can start with small capital.
Capital - There is lot of risk of loosing capital, so persons having small capital should avoid intraday trading
Requirements - Intraday requires promptness, faster entry and exit from the trade, very alertness on news etc. But once you gain proper and appropriate knowledge then it is very profitable.

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