Intraday Trading: Technical Terms for a Fairly Simply Concept

The words used by the stock market seem designed to keep the common man at bay. Intraday trading is nothing more complicated than trades that occur within the same day. Day traders move quickly and intraday trading allows them to move even more quickly. Trades that cannot or will not wait until the next trading day are intraday trades- and with the speed that the world economy moves in, might be the way of all trades.

Day trading in general and intraday trading in particular were both once considered the domain of the serious brokerage or investment firm employee, but that has changed in recent years. Now the more casual trader and even the novice can engage in day trading. Of course, just because it has become easier to be involved in both day trading and intraday trading does not make either practice less risky. You are still putting your financial well being on the line, and while you can make a good profit in a relatively short period of time with intraday trading, you could also lose that same amount or more in the blink of an eye. Because of the speed at which intraday trading occurs, it is best to get more comfortable with other, less risky investment ventures before trying your hand at intraday trading.

Some trading is done with borrowed money, which makes the venture even that much more risky. A bad trade costs money not only to yourself, but also to the backer from whom you got the money in the first place. For this reason, many people will not back a day trader, but there are, of course, some who will. Financial backers may do so in order to experience some of the thrilling, fast paced action of intraday trading without having to do the white-knuckle leg work themselves. These are usually well off people who can afford such risks, but would rather someone do the actual risk taking for them.

Among day traders and intraday trading there are “scalpers” who buy and sell during the day quickly and often- they like movement every few minutes or less. There are also day traders that will start a day with a stock position and remain there for the entire day buying or selling just before the market closes for the day. (This does not qualify as intraday trading.)

Many of the old school financial wizards denounce day trading and truly despise intraday trading, calling it nothing more than “high stakes baseball card trading with restless children.” They would say the market needs investors who sit back and study the economic climate, the market trends and the stock volume of the stock that catches their interest. They would say that the time for fast moving trading and such haphazard risk-taking is during more stable economic times, and they might be right. But, the world’s economy moves at the blink of an eye now, and if you can’t catch on and catch up, then the world will just “catch you later”.