When the trading of stocks and other financial instruments happens within a single day, then that type of trading is known as intraday trading. In the case of intraday trades, all your positions are squared off before the market’s closing, and you can’t change the ownership of shares as a trading result. Before, people thought that intraday trades were the domain of financial firms and professional traders. With the popularity of margin and electronic trading, this thought has changed.
If you have enough time to gather knowledge about the Stock market, watch it closely, and can take high risks, then you can participate in intraday trading. As intraday trades give higher returns, they also have higher risks than other investment options. You must understand the market and perform technical analysis on daily changes to decide correctly.
In the case of intraday trades, you have to make sure to choose stocks that are liquid enough to execute. That’s why high liquid stocks such as large-cap stocks are recommended highly in this case. It will help you to liquid your stocks without getting their price impacted.
Thus, if you are going to take part in intraday trading, you have to time the market correctly. If you take a position at the wrong time, you can suffer loss. According to many professionals and experts, it is suggested not to take a position in the first hour of a trading day as the market tends to be volatile during this period.
If you want to participate in an intraday trade, you will have to open a trading account and a Demat account. Right then, you have to choose the right tools for trading and investing effectively.
According to the Income Tax Act, intraday trades get treated differently. Your gains from your Intraday trading will come under the category of business income instead of a capital gain. They will get put into your overall income involving your salary. However, profits that you make from deposits will be subject to taxation according to the slab rate.
You can manage your intraday trades with the right tools. Tools like Daily Chart will help you identify stocks’ trends and price movements. Other than these, you will also have to keep some other things in mind.
- First, focus on how much you are willing to lose overall and per transaction. When you can protect your capital from losing beyond a certain point, you will be able to generate your daytime profits after a certain period.
- Moving away from the market is also a crucial decision for daytime traders. As a daytime trader, you need to make three essential decisions: when to buy, when to sell, and when to wait.
- Track wins and losses and rates them at the end of the day. Track unsuccessful and successful transactions too. Keep your scrapbook and analyze what went wrong and what worked better.
Kotak Securities is one of India’s leading stock broking companies serving financial products for more than two decades now. They help you open a Demat account and a Trading account at no cost. You can participate in Intraday trading on Kotak Securities with ease and convenience. They charge zero brokerage on intraday trades.
