Intraday Trading

Intraday trading is the opening and closing of a position in a security within the same trading day. There are however different schools of thought that you will come across that are contrary to this. Some sites state that intraday traders will hold positions open for more than one day. It is our belief and our practice that intraday trades open and close within minutes to hours in the same trading day.

Perhaps the confusion appears because intraday trading is used interchangeably with day trading. Day traders will hold positions open sometimes for an entire day however they technically, close out their trades before the end of the day. You will find the occasional day trader who opts to keep a position open overnight, however, this is not common practice. Scalpers, also practice this type of short-term trading since they too profit from small moves in the market and they only hold positions for minutes to hours as well. The terms, scalpers, day traders, and intraday traders can be and are often used interchangeably.

Intraday traders attempt to capitalize on small price movements in the value of a security by using “margin” and “leverage” which basically means to borrow money. Traders use technical analysis to practice intraday trading including technical indicators such as the moving average , candlestick patterns , stochastics , and more. Buying and selling are done in order to capitalize on the potential rise is a security’s value and shorting is done as well to capitalize on a potential drop in value. Intraday traders must be very disciplined in their approach and must ensure that they cut their losses through the use of stop loss orders in order to limit the potential downside for a trade.

There is a lot more to intraday trading and it takes a lot of practice and expertise to do so successfully. Please click here to see when you can join us in our 2-Day Online Clinic to learn more detailed information regarding this type of trading.

Please also read about Japanese Candlesticks which is a trading strategy used by some of the world’s most successful traders along with other forms of technical analysis. It is the fastest way for new investors to quickly and accurately read stock charts when trading stock . Once you are comfortable with the major candlestick signals, expand your expertise by learning the secondary Candlestick Patterns. Combine these with your favorite technical analysis indicators, and the different types of moving averages , and you have the perfect trading arsenal for evaluating stocks, currencies, commodities, or exchange traded funds .