InvestorQ : What are the major reasons why intraday trading becomes more risky for a trader?
Bhavika Nehru made post

What are the major reasons why intraday trading becomes more risky for a trader?

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Bhavika Nehru answered.
3 years ago
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Intraday trading is risky for a variety of reasons. Firstly, intraday trading operates within the window of just five hours and the position needs to be closed out within that time period. There is no question of carrying forward the trade since you just do not have the capital or the risk appetite. Secondly, volatility works against the intraday trader. It is much easier to trade a stable stock compared to a volatile stock as stock losses can get triggered quite rapidly in case of volatile stocks. The catch is that you also need stocks that react to news making it almost like a Catch 22 situation. Thirdly, intraday trading also runs the risk capital erosion as you trade with finite capital. That is true of every trader big or small. Capital erosion impacts your funds available and the total leverage that you will be permitted to take. Also it is a mental barrier to taking further risk.

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