Intraday Trading – The Pros & Cons

Intraday trading also known as day trading / short term trading, refers to all trading positions will usually be opened and closed within the same trading day. Even, some intraday traders focus on very short term trading, in which a trade may last seconds to a few minutes. The pros and cons of intraday trading are:

Pros:

• Because of the amount of trades being placed, compounding has a greater effect on your overall profits.
• You can make money faster.
• Allows you to always be actively participating in the market.
• Because of the last two, traders can exhibit addictive behaviour (gambling).
• Risk control – positions are closed out overnight so unexpected market changes will not affect your bottom line.

Cons:

• Day trading is considered a risky trading style. Traders can lose a substantial amount of money in a very short period of time.
• It is commonly stated that 80-90% of day traders lose money.
• Spread has a larger effect on your overall profits.
• Very difficult to learn.
• Time consuming.
• Day trading is very stressful.
• Can be harder to predict the market.

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