HFM information and reviews
Octa information and reviews
FXCC information and reviews
FxPro information and reviews
FBS information and reviews
Vantage information and reviews

Intraday Trading: The Complete Guide

The advent of online trading available to anyone with a smartphone or tablet has opened up financial markets like never before. Modern technology, 24-hour news, and minimum commissions have levelled the field for anyone wanting to trade. Intraday trading, or day trading, has grown hugely over the past several years on the back of this technological shift.

This style of trading is one of the most popular ways of buying and selling CFDs on currencies, stocks and different financial assets. By trading during the day, traders hope to create opportunities on sharp movements in price action. Various strategies can be used to take advantage of market mispricing, with positions always closed out at the end of the trading day.

What is intraday trading?

Intraday trading involves the buying and selling of financial instruments within a single trading day. This means a trader will never hold an open position overnight. They will close out their positions at the close of each day and start over the following day. The purpose is not to invest over the long term. But instead, it is to trade in and out of positions, sometimes at high frequency, for quick gains. Changes in markets are tracked closely to analyse price action. Small market movements help guide traders in their decision making.

One of the key prerequisites to successful intraday trading is the implementation of a prudent risk management plan which helps cut down losses and prevent losses from getting out of control Strategies such as the use of stop loss and take profit orders would enable traders to understand what price they are willing to pay and at what price they are willing to sell.  On the contrary, without having a risk management mindset, traders may be more prone to let emotions impact their decision-making, which is often disastrous when it comes to intraday trading.

How does intraday trading work?

Intraday trading often involves executing a large number of trades in a short space of time. There may be a relatively small profit (or loss) for each trade. This will potentially build up throughout the day depending on the frequency of buying and selling, and the strategy involved. It is important to remember that intraday trades will require a trader to square off open positions at the end of the day.  If the trader is using margin, then the trader’s long or short position will need to be offset with the corresponding opposite trade. This means the trader’s book is then “flat” with no open positions and no overnight risk.

For CFDs on stock trading, this implies there is no transfer of ownership of shares with the usual settlement of trades over a period of time. By closing out positions at the end of the day, “gapping risk” is avoided. This is when overnight news can cause a price to open considerably higher or lower than the previous day’s close.

Why do intraday trading?

Who should consider intraday trading?

Intraday trading basics generally involve time, focus and a distinct mindset. A decisive personality and someone who makes quick decisions may suit the high-octane life of a day trader. This is especially the case if your strategy entails a high volume of trades in a short period of time. Day trading contrasts with traditional long-term investment strategies where investors seek to create opportunities from price moves over the extended life of a trade.

Strategies of intraday trading

There are numerous styles and strategies of trading to use as a day trader. The most common are:

How to start intraday trading

Intraday trading takes time and commitment to achieve consistency. Determine your ambitions, a risk management plan and enjoy the intraday trading journey!


Share: Tweet this or Share on Facebook


How does interest rate affect currency rates? How to make money on interest rate changes?
How does interest rate affect currency rates? How to make money on interest rate changes?

How do you predict the currency exchange rate when interest rates change? Can an ordinary trader make money off it? Octa analysts explain in the article.

Is it Easy to Learn Forex? A Comprehensive Guide to Mastering Forex Trading
Is it Easy to Learn Forex? A Comprehensive Guide to Mastering Forex Trading

Forex trading is a popular and potentially lucrative way to earn both active and passive income. However, it's essential to understand that learning forex is an ongoing process that doesn't depend on whether...

Exploring the Trustworthiness of Forex Trading: What You Need to Know
Exploring the Trustworthiness of Forex Trading: What You Need to Know

Forex trading is indeed a legitimate and trustworthy way to engage in financial markets and potentially reap profits. However, it exists within a complex industry where both rewards and risks can be exceedingly high...

Beginner's Guide to Forex Trading with FXTM
Beginner's Guide to Forex Trading with FXTM

If you're new to the world of forex trading and looking to embark on your trading journey, you've come to the right place. Forex trading can seem complex at first, but with the right guidance...

Common Mistakes Made by Novice Traders and How to Steer Clear of Them
Common Mistakes Made by Novice Traders and How to Steer Clear of Them

Trading in the financial markets is a realm that beckons many, but it is fraught with challenges that often go underestimated by novice traders. A lack of profound understanding of market intricacies...

Demystifying Stock Exchanges: The Heart of Financial Markets
Demystifying Stock Exchanges: The Heart of Financial Markets

Understanding the inner workings of stock exchanges is crucial for traders and investors. These financial powerhouses are more than just platforms for trading...

MultiBank Group information and reviews
MultiBank Group
XM information and reviews
FP Markets information and reviews
FP Markets
FXTM information and reviews
AMarkets information and reviews
BlackBull information and reviews

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.