Intraday vs Positional Trading

Thinking of entering the stock market, but confused about which trading styles suit you? You are not alone, there are many beginners who often remain confused between different trading styles, and hence here we are with the complete details of Intraday vs Positional Trading.

So let’s get started to understand the difference between intraday and positional trading.

Let’s start with the situation when Raj visited Chennai on a business trip. He faced challenges while communicating with the localities, that’s when he met Simran who helped him and guided him throughout the deal, finally, Raj convinced the clients and happily went back home.

This is somewhere like intraday trading, where the investor entered the position and squared it off in the same day. 

On the other hand, let’s suppose,

Raj was earning well in an organization, but he had a desire to crack a government job. So while working he prepared for every vacancy for about 7 months. 

Finally, he cracked the UPSC CDS exam and now he had a choice to stay in the current organization and prepare to crack a better exam or grab the opportunity he has in his hand. 

In both scenarios, he is availing pretty good benefits. So, here he made the decision to join the government firm and fulfill his dream. 

This equates to positional trading. 

To understand the concept in a better way, let’s first start by understanding the meaning of both Intraday vs Positional Trading.

What is Positional Trading and Intraday Trading?

Any comparison starts with the meaning. 

Now positional and intraday trading both are done with the same objective i.e. to earn profit. 

But on one hand, where intraday is all about buying and selling positions in a day, positional trading is to buy and hold the position for six months to one year. 

Let’s dive into more details to understand its meaning and the difference between the two. 

What is Intraday Trading?

As discussed above, when a trader buys and sells the stocks on the same day during market hours is called Intraday Trading. 

So for any investor who has just entered the stock market space, intraday trading can be quite risky, for it requires an in-depth analysis by which we mean technical analysis. 

This type of trading includes a clear prediction of price movement using various indicators and charts which further helps in making buying and selling decisions to book maximum intraday trading profits. 

Intraday trading is short-term trading in which the traders always seek opportunities to gain either by going long or by short selling as per the convenience and their goals. 

You must have heard, “Prevention is better than cure”

Not only in medical terms, but this quote also applies to the stock market investors as well, especially the intraday traders, you need to monitor the market to check and analyze the minute-to-minute price fluctuation. 

For investment involves your capital and you may lose it all at once if you deliberately ignore the risks involved and if you try to play with half knowledge. 

We see that beginners tend to get influenced by professionals when they talk about profits. 

However, you need to keep in mind that, each investor has his own financial goals and risk appetite and thus the strategy that worked for Mr. Mukesh Ambani might not always work for Mr. Anil Ambani, as we’re well aware!

We can only say that it makes total sense to learn intraday trading from the basics so that you are not dumbfounded later.

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What is Positional Trading? 

Well, when it comes to positional trading, this is mid to long-term trading in which the investor holds his positions or shares for a comparatively longer duration than intraday trading. 

In short, the trader holds the positions until he makes the profit he expected from the stock. 

This time period can range from a few weeks to a few months or even up to a year or two. 

Positional traders aren’t actually a fan of short-term price fluctuations, they are trend followers instead. They primarily focus on the company’s fundamentals and its past records to check the sustainability while picking the stock. 

And since they keep investing in huge amounts over time, to minimize huge risks of losses, they always prioritize putting trailing stop loss while placing their orders. 

Also, to keep their profit and losses in check it is good to consider the quarterly reports for the company in which they have traded. 

Further, let’s see the time frame of both intraday and positional trading. 

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Positional Trading vs Intraday Trading Time Frame

We have understood that the major difference between these types of trading is the time frame. So here we’ll see the best time to do intraday trading and positional trading. 

Intraday Trading Time 

As said earlier, this type of trading requires continuous watch and sharp eyes to grab opportunities as soon as they become visible on the screen. 

Talking about intraday trading, since it is also known as day trading, it is clear that any investor in this type of trading must square off the position on the same day they buy or sell the shares. 

To be more specific, the intraday square off time for BSE and NSE function between 9:15 am to 3:30 pm. Meaning, an intraday trader must be active on the market performance starting from 9:15 am. 

And if at any time in between he or she places an order be it buying or selling, the position must be squared off by 3:30 pm, or else the stockbroker might levy auto square off charges upon the trader, which might even result in losses.

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Positional Trading Time Frame

Well, the ideal time for trading in the Indian stock market remains 9:15 am to 3:30 PM for any type of trading. 

Whereas if we try to look for the best time frame to do positional trading, position traders usually try to open positions when a strong bullish trend is observed. 

You can place the order when the trends seem to go uptrend. You can place the After Market Order as well where you usually place trade even after the market hours. 

After taking an open position you can hold your shares for the period of 6 months to one 1year or two until you reap the benefit out of it. 

Let’s move on to the process of how you can avail the benefits as an intraday trader or positional trader. 

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How to do Intraday Trading and Positional trading?

To understand intraday vs positional trading, here comes the point of how to do or what are the different trading styles one must opt for to grab more profit in either of the trade. 

As already known, for trade success, it is important to do analysis that further depends upon the chart style, indicators, and strategies.

Since the basic difference between the two is the timeframe and so does in picking and customizing the indicators. 

We know for the fact that in intraday, you check minute to minute charts while positional trading is quite flexible where you may check monthly or even yearly charts.

In intraday smallest price fluctuations matters to book profits while in positional trading, the investors have pre-defined financial goals, and thus, just 30 minutes of the market watch is enough to understand the probable trend movement.

While we’re talking about indicators, let’s look at the time frame that you must look at individually for both these types of trading.

 

Although RSI (Relative Strength Index) only tells you the overbought and oversold signal, when used strategically, you may even predict the buying and selling signal.

When the RSI tries to cross 50, you get a buying signal and when you see RSI dipping below 50, you may see it as a selling signal.

Similarly in positional trading, the ideal RSI range is between 40 and 90. And just like intraday, here also you may see a benchmark at 60. When the signal is above 60 you may go long else you may go for selling.

Here for a better analysis experience, it becomes necessary for you to open the demat account with the broker offering the best UI, multiple charts, and indicators in their trading app.

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Confused with whom to start trading journey? Open the Demat Account with the renowned stockbroker for FREE and gain a better experience of trading.

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Finally, as we have come to an end of the comparison, let’s look at some of the pros and cons of each of these. 

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Is Intraday Trading Safe?

Till yet you are now able to understand intraday vs positional trading meaning, time frame, and different indicators that can help you in gaining a better understanding of different of the two.

But are these trading types safe for you, for this let’s dive into the details of the advantages and disadvantages of trading style, starting with intraday trading.

 

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Is Positional Trading Safe?

Next to the intraday trading now let’s throw some light on Positional trading pros and cons to grab the understanding of intraday vs positional trading.

For this, check the major parameters in the table below:

 

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Conclusion

To sum it up, you may look at the table below to see 5 major differences between Intraday vs Positional Trading.

 

Now that you have understood the difference between Intraday trading and Positional trading, choosing a trading style clearly depends on the investor based on certain factors such as :

• Financial goals
• Risk appetite

And hence before directly getting into trading style, analyze these three factors and get ready to book more profits so that trading doesn’t come to you as a shock but a pleasant surprise instead.

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