Delivery trading means investing those shares which you do not want to buy and sell within the same day. You can hold them for as long as you want. Intraday trading means selling off the shares you have purchased on that day, before the day closes. However, those shares get squared off automatically, even if you aren’t able to sell them off by day trading.
Intraday trading is convenient for those who are not interested in long term investing. By tracking every minute change in share prices, this type of trading gives opportunities to thousands of small investors.
Intraday Trading or Delivery Based Trading – Which One Should You Choose?
Day trading has more advantages than disadvantages over delivery based buying stocks. In intraday trading, investors can buy shares for just a few minutes or hours, whereas, in delivery based trading, you can buy them for months and years. This is one of the decisive factors for investors to prefer delivery based trading.
One of the biggest advantages of intraday trading is that you can buy shares by just paying the margin money instead of paying its full price. This means more gains with lesser investments. However, that also means that losses would be higher. Another advantage is that it allows you to sell off the shares before buying them. This process is convenient in ensuring that you can gain profits even when the price of the share is expected to fall. Also intraday trading gives an opportunity of paying a low brokerage than delivery trading. But, one of the biggest disadvantages of intraday trading is the timing. It doesn’t benefit you with long term investments like dividends and bonuses.
How to Perform Intraday Trading?
The best way to perform intraday trading is to follow the current trends in market. If it is rising, buy first and sell later, and vice versa. Book your profits at regular intervals, and stick to a trade plan. Set a profit loss limit, and stop loss levels. This will limit losses if market is stagnated. Plus, always choose liquid shares and trade small shares. One basic rule is not to trade in the first hour another one being fixing an entry price and levels of target. Also, if profits are met, withdraw immediately.
Follow these simple tips and tricks to master the art of intraday trading and become a pro investor in stock market.