Finance Knowledge

Everything you Need to Know About Day Trading

Did you know that a trader and an investor are two different items of the stock market? If you are a beginner, you mostly think that both of these things are the same. But, it’s okay – people who know about the market would know that they are entirely different from each other.

Who is an Investor in the Stock Market?

An investor in the stock market is in it for long-term profits. It is like any other investor who invests in real estate, gold, or any other tool. An investor will only look at the long-term profits of the market and will not seek any short-term profits. They will be invested and only invested for the long term.

Who is a Trader in the Stock Market?

A trader in the stock market is nothing like an investor; he is only in it for the short term. He would not look into the long-term goals of the stocks and shares he is investing in; rather, he would be buying and selling off quicker.

For instance, an investor would buy from Nifty pharma because he sees a medical company has a bright future. A trader, on the other hand, will only see how the business is going to do today or sometime soon so he can move out with more than what he had invested in the share.

Also, when it comes to Trading, there are different types of Trading in the stock market.

Types of Trading in the Stock Market

Trading in the stock market is of various kinds, and they are:

1) Intraday Trading –

This is the kind of Trading that is done on the stock market the most frequently. Same-day Trading is referred to as intraday trading. Before the market shuts, the traders must sell and buy or buy and sell their stocks. This approach is also known as “squaring off the trade.” For those looking for bigger returns on investment than any other format, it is one of the most aggressive methods of Trading.

2) Arbitrage Trading –

The practice of arbitrage trading involves taking advantage of price discrepancies between two or more markets or exchanges. Since this doesn’t require many analytical abilities but does require a fast network, it is only available to top trading organizations with a large network.

3) Swing Trading –

This kind of Trading is short-term, usually lasting two days to two weeks. When investing in stocks or options, swing trading is an excellent choice. This group includes technical traders and chartists who enjoy tracking short-term price momentum with technical instruments. Due to the higher margins in overnight trades, the capital requirement is higher than in day trading.

4) Options Trading –

A mathematical and objective way of thinking is necessary for options trading. Given the difficulty of planning, it may take some time and effort for someone to become proficient at developing and putting their own strategies into action. The absence of options traders in India is primarily the result of inadequate awareness and knowledge.

5) Positional Trading –

This trading approach has a long time horizon. Positional traders feel that their long-term perspective will bring about a resolution. Hence they overlook short-term market swings. Holding term isn’t the most crucial issue because traders are constantly searching for significant game changers within the company to help them achieve their targeted returns.

6) Money Flow Trading –

Open interest analysis, promoter trades, stake sales, gross delivery statistics, FII inflows, and DII movements into and out of stocks are all factors in money flow trading. Such information is critical for predicting market trends. If you enjoy analyzing money movements, this is the type of trading technique for you.

7) Technical Analysis Trading –

Technical analysis of the stock market is critical to any trading strategy. The use of stock technical analysis tools may provide you with a better understanding of the stock market’s near-term fluctuations in demand and supply. Technical analysis is a technique that can help traders become effective day traders, positional traders, or swing traders.

8) Event Trading –

Event-based Trading capitalizes on a business event that has either occurred or is going to occur. It seeks to profit from changes in market prices during mergers and acquisitions, bankruptcy, earnings calls, and other events. This trading method necessitates technical analysis abilities in order to understand how such changes affect the market before an event occurs.

9) Quantitative Trading –

The foundation of quantitative Trading is quantitative analysis. It is a very technical field of Quant Finance. Many persons with a statistical or mathematical background find success through computer analysis and data crunching. A person who is interested in this field must be proficient in programming and mathematics. It is recommended that you thoroughly research this style before using it.

10) High-Frequency Trading –

The essence of high-frequency Trading is speed. Rapid-speed computers are used by investment banks, institutional traders, hedge funds, and others to transact large orders at high speeds. Because everything is computer-based, there is no time for analysis and simply swift execution. Individuals should avoid this form of Trading, but if you are interested, you can start your own fund or join one as a programmer.

What is Day or Intraday Trading in the Stock Market? Explained

Intraday trading is the purchase and sale of equities on the same day.

It is accomplished through the use of internet trading platforms. If a person buys stock in a corporation, they must specifically say ‘intraday’ in the platform’s interface. This allows the user to buy and sell the same amount of stocks in the same firm before the market closes on the same day. The goal is to profit from the fluctuation of market indices.

Many people refer to it as day trading.

How Does Intraday Trading Work?

Intraday trading is a strategy in which you buy and sell stocks on the same trading day. Traders might thus profit from price variations that occur during market hours. If the trader estimates the price to rise during the day, he or she will acquire a large number of shares and then sell them at some point during the day.

The opposite, known as short-selling, can also occur. Short-selling is a strategy used by traders to profit from a declining market. This is when they borrow stocks and then sell them on the market. When the price lowers to the desired level, the traders purchase shares at the reduced price and return them to the lender.

Since day traders effectively profit from volatility, they are exposed to significant risks. This is significantly more than the risks incurred by a long-term stock investor.

As a result, most intraday traders are speculators willing to incur significant risks. They typically use margin trading to perform high-value trades worth thousands and crores of rupees.


Intraday trading, though, seems promising but requires a lot more expertise and skill of the market to get going further on.

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