What is Intraday Trading?


Intraday trading is a unique kind of order that enables the user to take an intraday position, benefit from more exposure, and be protected by a stop loss order. A market or limit order and a related stop loss market order, which would only be triggered at the specified stop loss trigger price, will both be placed by the system at the same time. The stop loss order is carried out as a market order if the trigger price is reached.

Because of the way they operate naturally, the best time frame for intraday trading experts assists traders in reducing downside risks and offers better control over risk management. Cover orders can assist users in trading more systematically because each trade always has a stop loss associated with it. Users can profit from the advantages of margin by leveraging their positions significantly using the cover order facility while enjoying the advantages of a stop loss to shield them from downside risk. Overall, cover orders minimize negative risk without restricting returns.

Procedure for Cover Orders

  • In essence, a cover order is a two-legged order. The customer must submit a buy/sell order with an obligatory stop loss order in the opposing direction.
  • Market or limit orders may be used as the first entry order.
  • When the trigger price reaches the stop loss limit price, the related stop loss order becomes a market order and is placed in the order book as a Stop-Loss trigger pending order.
  • The client is required to place the stop-loss order inside the daily defined trigger price range. Assume, for instance, that Reliance Industries is trading at Rs. 900 and that the range is 10%. The client might provide the Stop Loss order in this instance.
  • The customer will not be able to cancel the Cover Order once it has been made and the first leg has been traded. Only the current one-sided position can be left behind by the client.
  • You can cancel the Cover Order if the initial order hasn’t been traded.
  • Within the designated price range, the stop-loss order may be changed. The margin will be adjusted after the order has been changed.

Three best trading time frames are intraday, swing, and positional

Many people are interested in finding out which time frame is ideal for swing and positional trading. Let me explain if you don’t know what Intraday, Swing, or Positional are.

  • Intraday trading is the practice of buying and selling securities on the same business day.
  • Swing trading is the practice of purchasing stocks and holding them for a few days to a few weeks.
  • Positional Trading is when you acquire stocks and keep them for a number of months or years.

Another term for trading that lasts only a few seconds to a few minutes is “scalping.” “Scalpers” aim to earn quickly when they identify a profitable trade. In scalping and intraday trading, you can open and close on the same day. Short- to medium-term swing trading is appropriate. Additionally, positional trading typically lasts a medium to lengthy time.