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Difference Between Intraday and Positional Trading

Every trader in the stock market has the option of choosing between two different types of trading: intraday and positional trading. It is not necessary to choose one of them; the trader can use his single Demat Account to trade both options. However, a trader must choose his trading style based on his investment, which will increase his wealth in the market.

Intraday Trading Meaning

Purchasing and selling shares on the same day is referred to as intraday trading. It is accomplished through the use of internet trading platforms. If someone wants to acquire stock in a company, they must specifically say 'intraday' on the platform's interface. Before the market shuts down, the user can buy and sell the same amount of stocks in the same firm on the same day. The goal is to profit from market indexes moving up and down. Many people refer to it as "day trading."

If you are a long-term investor, the stock market can provide you with excellent profits. However, they can assist you in making money in the short run.

What is Intraday Trading Explained here

Positional Trading Meaning

Position trading is a profit-making method in which a trading position is held for a lengthy time (usually weeks or months). In position trading, a trader would generally consider long-term and hold the position for a long time, regardless of short-term gyrations. For instance, the positions could belong to (purchasing the asset first) and (selling the item afterwards) (selling the asset first). Traders typically utilize long-term charts (weekly, monthly) to initiate trading positions in this type of trading, which is also known as trend following.

Difference Between Intraday and Positional Trading

The table below represents the distinctions between intraday and positional trading:

 

Intraday Trading

Positional Trading

Benefits

Benefits of Intraday Trading:-


  • Traders might generate large profits by aiming for a tiny target for a short period of time.

  • Intraday employs this type of transaction frequently since the trader's volume is significant, allowing the trader to simply position a trade.

  • In contrast to positional trading, intraday trading has cheap brokerage.

  • Intraday trading allows a trader to make money faster.

  • A trader can get started with a small investment.

Benefits of Positional Trading:-


  • When compared to intra-day trading, it is less dangerous.

  • They have the ability to generate higher percentage returns.

  • They provide a variety of strategic options.

Risks

Risks of Intraday Trading:-


  • Before trading intraday, a trader requires proper instruction and knowledge.

  • Intraday trading takes a long time because of the short length of the day. It is quite difficult to manage if you work full-time.

  • Intraday trading may be an extremely stressful experience because the focus is required.

  • Intraday trading is extremely risky; even a minor error can result in a significant loss.

Risks of Position Trading Strategy:-


  • Traders must conduct an extensive study before investing because the trader intends to invest for a long time.

  • Traders must wait a long time to reap the benefits of their investments.

  • If the trader invested in the wrong share, he must reconsider his investment. And it will cause a trader to be stressed.

Time Frame

Intraday Trading Time-Frame:-


This trading requires a consistent watch and sharp eyes to get opportunities as soon as they get visible on the screen. While speaking about day trading, it is clear that any investor in this type of trading needs to square off the position on that day of buying and selling shares.


BSE and NSE function between 9:15 am and 3:30 pm. This means you need to be active in the market starting from the time the market opens.

Positional Trading Time-Frame:-


The ideal time to trade in the Indian stock market would be from 9:15 am to 3:30 pm for any form of trading. The best time frame for positional trading is when you can try to open positions when a strong bullish trend is observed. You could place the order when the trends seem to be on an uptrend. You could also place orders aftermarket and even during market hours. 

To Know Stock Market Timings here for BSE and NSE

Positional Trading vs Intraday Trading - What to Choose?

When you have a limited capital budget - intraday trading is the way to go, as for positional trading - it takes a larger investment. The risk-bearing capacity is the second parameter. Intraday trading, as previously said, is a high-risk strategy.

When you are an investor who is willing to accept the high level of risk associated with intraday trading - you should do so; otherwise, positional trading offers significantly reduced dangers. The time is the third and last parameter for selecting the right kind of trading. When you are a full-time trader who spends the entire day on the computer screen, intraday is the way to go.

Difference Between Intraday and Positional Trading - FAQs

Q1. Positional vs intraday trading - which is better?

If you have a limited capital budget, intraday trading is a better option than positional trading, which will cost you more money. Another thing to think about is how much risk you could take. Intraday trading is a high-risk investment.

Q2. Is it profitable to trade positions?

The securities are either debt-based or equity., which can last for a long time and generate profits. Position trading, in general, can yield substantial gains that are not wiped out by high transaction costs.

Q3. What does intraday mean?

Intraday trading - it is often known as day trading. It is when you buy and sell stocks and other financial instruments on the same day. In other words, intraday trading means that all positions are squared off before the market closes, and there is no change in share ownership as a result of the trades.

Q4. What is the definition of short-term positional trading?

Short-term trading entails taking a position for a short period of time, ranging from seconds to days.

Q5. Day traders maintain holdings for how long?

With the exception of the Forex Market, day traders normally finish their trades throughout the day and avoid holding positions overnight.

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