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Intraday trading vs Position trading January 07 2021Intraday trading, Position trading, Intraday vs Po

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Intraday trading vs Position trading

Each trader has an opportunity to choose the form of trading from the two key options available on the share market, i.e., Intraday and Positional. There is no need to pick one of them as the trader can choose both options with his single Demat account for trading. But according to his investment, the trader must choose his form of exchange, which will make him wealthier in the market. 

Significant differences between Intraday and Position trading.

1. As the name Intraday itself suggests, you never have overnight positions in intraday trading. In other words, when the market closes, all open positions are taken out and you will have a net profit or net loss depending on your trading’s. Whereas In positional trading, depending on your trading process, risk management strategy and the time frame of interest, you can carry or hold onto overnight positions. As the simple reference span to book earnings, you could be positional with a 1-2 days’ time frame or you could hold trades for a week or months long time.

Intraday trading

2. Intraday trading is basically the type of trading where after the markets open in the morning of every trading day, you open trading positions and close them until the end of the day. In 24-hour markets, at the end of the trading day, you actually close trades and positions. Price movement in an intraday transaction would be a fraction of the regular average range traded. For example, if the daily range is 100 points, your trade can aim 20-50 points. The ranges are proportional to the time of interest and would be multiples of these numbers in a positional exchange. On the other hand, Positional trading is that type of trading where traders are prepared to hold positions as long as one or more days, weeks or months are necessary. The time frame relates to the preference of traders for positional trading.

3. When it comes to carrying certain position for just a few days, a short-term positional trader can carry positions. Coming to long term for days, weeks or months, a long-term positional trader can carry positions.

4. The type of trading that you use could be the same. What is evolving is the needs for working capital and risk power. Generally, these are much higher. Therefore, you would probably need 50 percent or more working capital for a simple positional trade as a margin to carry forward futures contracts overnight. 

What is Positional Trading?

5. Since the positional trading ranges are much larger than the daily ranges, the risks of stop loss can be greater than intraday risks (although not always necessarily).

6. If a trader has huge capital and lots of patience it is vital for long term trading. On the contrary if a trader is impatient, he can opt for intra-day trading.

7. As a comparison to Positional trading brokerage, intraday trading brokerage is less.

8. Compared to Positional trading, a trader can make money in intraday trading in a quicker way.

9. It is necessary for an intraday trader to be efficient and have a close look on the market to execute orders quickly and book earnings quickly because there’s no much time. But a trader trading in positions can take time to analyze and understand the market trends and accordingly move to generate profit.

10.Full time traders can opt for Intra-day and Position trading but office goers who can’t sit in front of the screen for the whole day cannot opt for Intra-day trading.

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Long term positional trading

You trade like an investor with a horizon of weeks and months in this method of trading. The stop loss risk levels can go as high as 100-200 points because the trading ranges are wider, while the incentives can go from 200-1000 points or more. Once you have tasted success in the above-described intraday or short-term positional trading, you can then consider this form of trading.

Pros and cons of Intraday trading

Benefits of Intraday trading

· For a short period of time, traders aim for a small target and can make big profits.

· Intraday uses a form of trade very frequently, because the volume of the trader is high, so that the trader can easily position a trade.

· Brokerage: As a contrast with Positional, brokerage is low in intraday trading.

· A trader can make money in intraday trading in a quicker way.

· A trader can start his trade with a low investment.


· A trader requires adequate guidance and knowledge before trading in Intra-day.

· Intraday trading, because of the short length of the day, takes a very long time. If you have a full-time job, it is very hard to handle.

· The handling of intraday trading is very stressful. Since concentration is needed.

· Intraday trading is very dangerous, a big loss can result even from a small mistake.

Pros and cons of Positional trading

Benefits of Positional Trading

· It is less risky as compared to Intra-day trading

· They are capable of producing higher percentage returns

· They offer a range of strategic choices.


· Before investing, traders have to do too much research. Since the trader will be investing for a long time.

· Traders need to wait a long time to get their investment rewards or gains.

· He has to think about his investment if the trader has invested in the wrong share. And it'll result in bringing stress on a trader.

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3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

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