Positional and Intraday Strategy

Description

What is a Positional and Intraday Strategy for Cheap?

Traders in the Indian stock market have different goals and strategies. Some may prefer capitalising on short-term price movements, while others may have a more long-term outlook.

These differences have resulted in various trading strategies like intraday and positional trading.

 

Intraday trading vs. positional trading

Intraday trading and positional trading are two very different strategies. The risks involved, the capital needed, the returns, and the timeline vary significantly. This often results in a very

common dilemma about intraday vs. positional trading.

If you’re a newcomer to the markets, you may also be confused about the positional trading vs. intraday trading debate. To better understand which strategy you should choose, check

out what these strategies entail and how they differ from one another.

 

What is intraday trading?

Intraday trading is entering and exiting trade positions within the same trading day. No overnight positions are held. The main aim of intraday trading is to proht from price fluctuations

within a single trading day. As a result, traders must monitor the markets continuously throughout the active trading hours. It is also essential to be well-versed in technical analysis to

execute intraday trades successfully.

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Advantages of intraday trading

One of the most important aspects of resolving the positional trading vs. intraday trading dilemma is understanding each strategy’s advantages and limitations. Let’s begin with the

benefits that intraday trading offers.

• Potential to earn profits within a short duration
• No exposure to overnight risks
• The benefit of higher leverage offered by stockbrokers
• Multiple trading opportunities in volatile markets
• No requirement for large capital outlays

Disadvantages of intraday trading

Intraday trading also carries certain limitations, which include the following:

• High stress from constant market monitoring
• Increased risk of loss in volatile markets
• Potential for substantial losses due to higher leverage

What is positional trading?

In positional trading, an open position is held for longer than a single trading day – over several days, weeks or even months. Sometimes, a single positional trade may be held for many

years to leverage long-term price appreciation. Since the timelines are more diverse in positional trading. you need to be adept at technical and fundamental analysis to use this

strategy.

Advantages of positional trading

Like intraday trading. positional trading also has many advantages and certain limitations. Only by getting to know these details can you get more clarity about the intraday vs.

positional trading comparison. Check out the benefits of positional trading.

• Less need to monitor the markets constantly
• Opportunity to capture larger market trends and price movements
• Reduced overall brokerage costs due to fewer trades
• More time available for adequate research and analysis
• Opportunity to diversify your investment portfolio across sectors

Disadvantages of positional trading

On the flip side, positional trading also carries some risks, as outlined below:

• Exposure to overnight risks over the long term
• Requirement of a larger capital outlay
• Capital may be locked in for a longer period

Intraday Vs. positional trading: which one should you choose?

To effectively resolve the intraday vs. positional trading dilemma, let’s take a closer look at the differences between intraday and positional trading.