What is... INTRADAY TRADING?
The most intense of the 4 trading styles, intraday trading involves entering and exiting a position within the same day, typically holding it for only minutes or hours!
This also means that you get to create instant results, compound your money faster and eliminate overnight risks since you don’t hold any positions overnight.
If you're able to commit a couple of hours a day to analyse the market, like fast-paced and dynamic situations, why not give this trading style a go!
Intraday Trading
There are a few factors to take into consideration when deciding if a trading style suits you.
Does it fit your PERSONALITY?
If you’re someone who values efficiency and speed, prides yourself on your fast decision-making skills and enjoys overcoming challenges, intraday trading might be the right fit for you!
Can you commit the TIME?
Intraday trading requires the most time commitment from you as you'll need to prepare before the market opens and be there during the first 1-2 hours to enter and exit your trades.
This means that you will have to be present during the first few market open hours. If you are at work during those hours, it will be an issue, but if you are in Asia and you're trading the U.S. market, then it could work really well for you! In total, you will need to commit at least 2 hours per day for this.
Are your expected RETURNS realistic for this trading style?
Stastistically, intraday trading will help you generate around 60-120% of returns per year when you're competent and disciplined. However, this does require a lot of practice and commitment from your end.
To Add On
As intraday trading is a more advanced strategy, before embarking on your journey to be an intraday trader, you first have to learn and strengthen your skills in other areas such as the stock selection process, swing, and trend trading, as they are the foundational building blocks for intraday.
If you think intraday trading is for you,
Or if intraday trading doesn't seem like the right fit,
The REALITY of trading styles
Things to Note
Important:
Whatever trading style that you choose now is not cast in stone. In reality, most traders and investors master a few trading styles that they use simultaneously or seasonally depending on the market condition.
Therefore, there is no absolute best trading style, only the most appropriate according to your personality, time commitment, expected returns, lifestyle and also the market condition.
Understanding different trading styles and knowing when to use them is key.
