What is the intraday meaning definition? For those who don’t know, “intra” is a prefix meaning within. Hence, intraday means within the day. Regarding stock trading, you buy and sell stocks within the same day. Day traders often do this.
With intraday trading, the goal is not to invest. The goal is to profit off quick movements in stock prices each day. And profit people do. So many millions of traders are lured into trading with the promise of lucrative returns.
But the fact is, you need to know what to look for if you ever want to reap those returns. So keep your eyes glued, and I’ll show you what to look for so those returns end up in your pocket.
Day Trading Course
Table of Contents
Intraday Meaning Explained
What is the Intraday meaning? As I mentioned above, intraday means “within the day.” So, as an intraday trader, you trade within the day during regular market hours. For those of you who trade on the New York Stock Exchange – one of the largest stock exchanges in the world, the regular trading hours are from 9:30 am to 4:00 pm local time.
Generally, the best time to day trade the stock market is the first hour after the opening, from 9:30 am EST to 10:30 am EST, and the last hour of the day is from 3:00 pm – 4:00 pm EST. Check out our stock market hours post for a complete breakdown of the trading times.
The most commonly traded securities are stocks and exchange-traded funds (ETFs). You must pick the right stocks because trades are opened and closed within the same day.
Besides, you’re only as good as the stocks you trade. Despite having the best trading strategies in the world, you won’t make money consistently if your stocks don’t move or have low volume.
Or, you could be just starting out and completely overwhelmed by the thousands of stocks available to trade. Luckily, picking the right stocks is easy if you follow the tips below.
Intraday Meaning Tips
- Pick easy-to-sell stocks (lots of volume, liquidity)
- High-volume stocks are key because it’s easier to get a fill, and the stock will have a good ATR (average true range)
- Pay attention to relative volume. The higher relative volume shows more activity than usual.
- Pick low-float stocks
In other words, high liquidity stocks. Even if a stock is at a rock bottom price and you think it’s a steal of a deal, be careful; if something seems too good to be true, it probably is.
You need to make sure you pick a high-liquidity stock. If there are no buyers for your stock, you might be stuck holding onto something no one wants and face a loss. Read our post on how to avoid the pump and dump trap. It doesn’t matter if you know the intraday, meaning if you fall for the pump and dump.
Trade Ideas Premarket Gappers.
1. Pick Stocks With High Volume
Do you know what happens when the volume isn’t there? The answer is slippage; slippage happens.
You’ll have a wide bid-ask spread if the volume isn’t there. It means getting the best price is next to impossible.
It could mean paying 5% to 15% extra for the illiquidity. For these reasons, you must pay attention to the volume of ETFs or stocks.
Sometimes, sectors have high volumes, which grabs traders’ attention. However, just because a sector like marijuana is ripping doesn’t mean all potstocks are running.
2. Relative Volume (ROVL)
Displayed as a ratio, RVOL compares the current volume to normal volume for the same time of day. For example, a stock trading ten times its normal volume would have a relative volume of ten.
As intraday traders, we want the RVOL at two or higher coupled with a positive catalyst – think news, positive drug trial, etc.
Generally speaking, almost every winning intraday trade is higher in relative volume that day than its average volume.
Remember, the trend is your friend. So, trend trading strategies are incredibly helpful.
3. Pick Low Float Stocks
Float, by definition, is the number of shares available to trade on the open market. Regarding momentum trading, the lower the float, the better.
It’s these low-float stocks that will move and move quickly due to their low liquidity. However, I must warn you: The lower the float, the more potential it has to do something nuts. For these reasons, stick with a float greater than 300,000.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
Trading Strategies and Intraday Meaning
- For those interested in trading intraday, you have several strategies available. A glance below, you can see these strategies include:
- Scalping. Scalpers try to make many small profits on small price changes throughout the day. Specifically, scalpers look to take advantage of changes in a security’s bid-ask spread and have to work quickly to make many small trades. Typically, intraday scalping uses one- and five-minute charts for high-speed trading. She may buy at $15.25, sell at $15.50, and buy again at $15.30.
Especially on slow days, many intraday traders rely heavily on scalping. But it’s essential to have low commission costs, or your profits can quickly be eaten up by your brokerage firm. If done right, it’s a great way to make steady profits.
- Range trading. One common strategy for intraday traders is trading the opening range breakout or the first 20 to 30 minutes of the market opening.
- News-based trading. Trading stocks based on news is one of the oldest intraday trading strategies. We can capitalize on the heightened volatility around news events by choosing news-sensitive stocks. We often see these moves after the news (i.e., positive results in a cancer trial).
- High-frequency trading strategies. In short, they use sophisticated algorithms to exploit small or short-term market inefficiencies.
- Tick Index monitoring to spot intraday trading entries helps improve the timing of your trade.
- Watch for particular patterns to trade. The failed bear flag strategy is amazing.
Luckily, with Bullish Bears, we trade various strategies and can help you pick the right one. We talk about them all in our live trade room.
Intraday Meaning Chart Example
An example of intraday trading would be when a trader buys a stock early in the trading day and sells it later that same day before the market closes. Here is an illustration of how it might work:
Let’s say I think NVDA has the chance to spike in the day due to upcoming news. On the morning of the new release, I bought 100 shares at $10 per share for $1,000. As the day progresses, the stock experiences positive news. This results in increased buying interest and upward price movement. I’m eager to see what happens, so I closely monitor the stock’s price. Once it hits $12 per share in the afternoon, I sell my 100 shares. As a result, I realize a profit of $200 (excluding any transaction fees or commissions).
In this example, I executed an intraday trade by buying and selling the stock within the same trading day. I made money by taking advantage of short-term price movements and successfully timing the entry and exit of the trade. Yay for me! And wouldn’t it be nice if I bought NVDA at $10/share and held it?!!!
Risks of Intraday Trading
Well, plenty if you don’t know how to manage risk.
Even though the money can be good, intraday trading has risks. Some of the main risks associated with intraday trading are as follows:
1. Your Emotions
Scalping, a short-term intraday trading strategy that aims to profit from small price movements, can often evoke strong emotions in day traders due to its fast-paced nature and potential for quick gains or losses. Given the high-speed decision-making and the need to act quickly, scalping can generate anxiety and stress. Traders may feel pressured to make rapid decisions, constantly monitor price movements, and execute trades within short timeframes.
Because of this, traders can be prone to making impulsive or emotion-based decisions, leading to poor trade execution or deviation from their trading strategies. The best approach is to manage your emotions effectively to avoid impulsive or emotional trading decisions. Maintaining a disciplined approach, using proper risk management strategies, and having a well-defined trading plan can help mitigate the impact of emotions on your trading.
Additionally, taking breaks, practicing self-awareness, and maintaining a healthy mindset are crucial to keeping emotions in check and making rational trading decisions. Sometimes, getting up from the computer is helpful, as is taking a 10-minute break and clearing your head.
2. Market Volatility
Intraday traders aim to profit from short-term price movements, but these fluctuations can be volatile and unpredictable. Sudden market fluctuations can result in significant losses if traders’ positions move against their expectations.
3. Trading Costs
Intraday trading involves frequent buying and selling of securities, leading to higher trading costs, such as commissions and fees. These costs can significantly impact profitability, especially for traders who make multiple daily trades.
4. Time Commitment
Intraday trading requires constant market monitoring, staying updated on relevant news and events, and actively managing daily positions.
Intraday Trading Importance
I can’t understate the importance of having the right technology, trading platform, real-time market data, and internet connectivity. Technical issues, system failures, or internet disruptions can impact trade execution and result in financial losses.
Day traders should avoid wifi due to security concerns and potential risks. Experts recommend using a wired internet connection instead of wifi when day trading. While the connection quality of Wi-Fi itself is not the main issue, the security of Wi-Fi networks can pose a problem. Data transmitted over wifi networks is not secure and can be easily stolen. Any financial transactions or sensitive information sent over wifi may be at risk.
Moreover, a wired connection can provide more stability and consistent speed, which is crucial for day trading. A fast and stable internet connection is necessary for timely trade execution and real-time data updates. Trading on wifi can be more prone to interruptions or slowdowns, which can negatively impact the efficiency of trades and the ability to react quickly to market changes. Could you imagine being short in stock without a stop loss and the price soaring suddenly?
Key Takeaways
- Intraday is shorthand for trading securities based on price movements during regular market hours.
- A Day Trader will pay close attention to price movements to capitalize on short-term fluctuations.
- Scalping, range trading, and news-based trading are a few of the different intraday strategies used.
Final Thoughts: Intraday Meaning
It requires dedication, hard work, patience, quick wit, and the desire to learn if you want success in intraday trading.
To a large extent, successful day trading involves 10% execution and 90% patience. If you want to gain expertise in day trading, hone your trading skills, and keep money in your pocket, sign up with Bullish Bears now.
Frequently Asked Questions
Intraday trading is when you buy and sell securities on the same day. It also refers to the highs and lows the security crosses during the day.
For example, you buy 100 shares of AAPL at 9:35 am and sell your 100 shares at 11:35 am.
Intraday trading, known as day trading, involves opening and closing positions within the same day. Intraday traders employ strategies that take advantage of short-term price volatility, such as scalping, momentum trading, or breakout trading. On the other hand, daily trading refers to a longer-term trading approach where traders hold positions for multiple days, weeks, or even longer. Daily traders focus on identifying longer-term trends and may use strategies like trend following or swing trading.
Intraday (buy and sell) trades happen the same day before the market closes. Overnight means you hold the stock from market close until opening. If you trade a market in the same time zone as you, the hold would be through the night.
