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You can trade online in a myriad of different ways; swing trading, position trading and scalping just to mention a few. Finding the right trading style that fits both the amount of assets you are willing to risk and the amount of time you want to dedicate to trading can help you minimize losses and create and experience you can actually enjoy. This article will lay out the basics of intraday trading to help you make an informed choice about which style is best for you.
If you are unfamiliar with the term intraday trading it is a method in which a trader commits all their trades, either buying or selling, within the period of one trading day. Let’s look at some of the disadvantages and benefits of intraday trading.
Intraday Trading Basics

Also known as day traders, intraday traders usually take advantage of the small movements of a currency pair, during the span of day. They often do this employing leverage, which in essence amplifies or multiplies the initial amount of money the trader has in their account similar to credit. This can prove to be very risky though, because it not only amplifies the initial amount of money it also multiplies the losses they may receive. Due to this though, many traders see day trading or intraday trading as being fast-paced and exciting way to trade, this is of course subjective.
Day Trading Cons

One of the biggest cons of day trading is that its carries a high level of risk. Another disadvantage of day trading is it requires a relatively large dedication of time; to intraday trade you must closely monitor the movements of currency pairs through-out the day and prepare/study before the trading day opens. You will need to commit multiple trades throughout the day, so accessibility is another issue with day trading. Beyond the money needed for trading, a significant initial investment must be made to acquire a trading platform and software to be able to actually commit these trades. Adding to these expenditures are the ongoing costs of commissions charged to multiple trades.
Day Trading Pros

Some traders claim that numerous small trades can mitigate losses. It is assumed these losses are smaller than the ones long term investments can sustain, as the movement of a currency pair won’t fluctuate largely over the course of a trading day. Again this is speculation as I mentioned in the introduction, day trading carries a high level of risk, due to its rapid pace and volatility. Also mentioned in the introduction though, this can actually be perceived as a benefit, if you feel that risk taking is exciting. A final benefit is that intraday trading can become an actual job thus allowing the day trader to be self-employed.
If you would like to try your hand at intraday trading, why not sign up for one of STO’s trading accounts, that offer four different levels of engagement, to help you create a tailored trading experience.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

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