Which is better? Intraday Trading or Long-term Investment
Publish Date: November 18th, 2019
By: Sandhya Kannan, Head – Content
Before you take a decision, you need to first understand the two concepts of investments.
What is Intraday Trading
Intraday traders do not hold any position overnight, i.e., they buy and sell within the same day. This trading strategy takes advantage of short-term market fluctuations in an asset's price, and all positions are closed within the same trading day. This strategy can be challenging for beginners as they may not have strong technical skills.
Long-Term Investment
This means holding on to your investment for months, at times even for years. This is a buy-and-hold strategy rather than quick selling. You need to do thorough research about the financial performance of a company before making an investment decision.
The decision to become a long-term investor or an intraday trader depends on the skills, investment goals, personality traits, etc., of the individual.
Intraday Trading Vs Long-term Investment
If you are a beginner, read on to know some factors to decide which trading strategy to adopt.
Read more: 5 Mistakes to avoid when trading in Equity
- Time Commitment
Intraday traders have to commit at least 2-3 hours daily. Whereas, long-term investors need to spend a considerable amount of time researching about the company. Day traders close their positions on the same day, so they monitor the daily movements in stock prices. But, long-term investors have to regularly monitor the performance of their stocks and stay updated with the news of the company whose stocks they have purchased. - Skills & Traits
Both strategies require discipline. Lack of discipline and emotional decisions may lead to losses.
Intraday traders are on their toes, and they have to make quick decisions. In order to make profits, they have to take advantage of small price movements. On the other hand, long-term investors have to be patient for their stocks to perform. Many investors sell the stock when it fails to perform, but this way you will end up making losses. In order to earn good profits, you have to hold stocks for a long duration, like 7-10 years or even more.
Conclusion
Consider these few basic factors before you choose your strategy. If you are able to give time daily, then intraday can be an option for you. But, if you don’t want the stress of monitoring the daily market movements, then go for long-term investing. Many people use both strategies for investing their money. Finally, the choice is yours!
Also read:
- Is Demat account required for SIP?
- Risks involved in Derivative trading
- How to open demat account without aadhar card
- Is intraday trading taxable in India
- What is good? intraday trading or long term Investment
