Intraday vs Positional Trading

Intraday trading involves closing all positions before the market closes, aiming to capitalise on short-term price fluctuations. Conversely, positional trading entails holding positions for extended periods, seeking to profit from longer-term market trends.
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Intraday vs Positional Trading
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3 mins read
06-May-2025

Intraday trading, or day trading, involves buying and selling stocks within the same day, focusing on short-term market fluctuations. Positional trading, however, is a longer-term strategy where traders hold positions for several days to months, aiming to profit from more sustained market trends over time.

What is intraday trading?

Intraday trading, also referred to as day trading, involves buying and selling stocks within the same trading day. The aim is to capitalise on short-term price fluctuations. Traders can also benefit from falling prices by short selling, which involves selling borrowed shares with the intention of buying them back later at a lower price to return to the lender.

Advantages of intraday trading

Intraday trading offers several advantages, including the potential to earn quick profits by responding to daily market movements. Traders can also use leverage, which allows them to control larger positions with relatively less capital, potentially enhancing returns. Additionally, since all trades are settled by the end of the trading day, there is no exposure to risks that may arise from overnight market developments.

  • Potential to earn profits within a short duration
  • No exposure to overnight risks
  • The benefit of higher leverage offered by stockbrokers
  • Multiple trading opportunities in volatile markets
  • No requirement for large capital outlays

Disadvantages of intraday trading

Intraday trading also carries certain limitations, which include the following:

  • High stress from constant market monitoring
  • Increased risk of loss in volatile markets
  • Potential for substantial losses due to higher leverage

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What is positional trading?

Positional trading, also known as position trading, is a strategy where traders maintain their investments over a longer duration—ranging from a few days to several weeks or even months. Unlike intraday trading, positional trading is based on broader market trends and aims to capture significant price movements over time rather than short-term fluctuations.

Advantages of positional trading

Like intraday trading, positional trading also has many advantages and certain limitations. Only by getting to know these details can you get more clarity about the intraday vs. positional trading comparison. Check out the benefits of positional trading.

  • Less need to monitor the markets constantly
  • Opportunity to capture larger market trends and price movements
  • Reduced overall brokerage costs due to fewer trades
  • More time available for adequate research and analysis
  • Opportunity to diversify your investment portfolio across sectors

Disadvantages of positional trading

On the flip side, positional trading also carries some risks, as outlined below:

  • Exposure to overnight risks over the long term
  • Requirement of a larger capital outlay
  • Capital may be locked in for a longer period

Difference between intraday and positional trading

To effectively resolve the positional trading vs intraday trading dilemma, let’s take a closer look at the differences between intraday and positional trading.

Particulars Intraday Trading Positional Trading
Time horizon Within a single trading day Days, weeks, months or years
Objective To capitalise on intraday price fluctuations in the market To capitalise on medium-term to long-term price movements
Frequency of trades Multiple trades within the same trading day Fewer trades over a longer period
Analysis techniques used Relies heavily on short-term price patterns and technical analysis Uses technical analysis but relies more on fundamental analysis
Risks involved Intraday price volatility risks Systemic risks and overnight risks
Capital required Lower capital requirement due to the leverage facility available to traders Higher capital requirement, especially for long-term positions
Tools and indicators used Intraday charts, moving averages, RSI, MACD, Bollinger Bands, intraday volume, etc. Long-term moving averages, financial ratios like P/E, P/B, P/S, debt-to-equity ratios, economic data, etc.
Returns generated At the end of a trading day Over the long term, only after the position is closed
Costs Incurred Potentially higher due to a higher number of trades Potentially lower due to fewer trades

 

Conclusion

This wraps up the positional trading vs. day trading comparison. Consider the differences between intraday and positional trading to make an informed choice between these two strategies. Your choice will also depend on your trading or investment expertise, financial goals and current financial liquidity. Of course, you can also include both of these strategies as a part of your overall trading plan.

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Frequently asked questions

Is positional trading better or intraday?

Whether positional or intraday trading is better depends on individual risk tolerance, time commitment, and investment goals. Intraday trading offers higher potential returns but also higher risk, requiring constant monitoring. Positional trading involves lower risk but also lower potential returns and less time commitment.

What is the difference between intraday swing and positional trading?

Intraday trading involves buying and selling stocks within the same trading day, aiming to profit from short-term price fluctuations. Swing trading holds positions for a few days to weeks, capturing intermediate-term price movements. Positional trading involves holding positions for weeks or months, capitalising on long-term trends.

Which is more profitable, swing trading or positional trading?

Profitability in swing or positional trading depends on various factors like market conditions, trading strategy, and risk management. Both styles have the potential for profit. Swing trading can be more active and potentially generate quicker returns, while positional trading focuses on capturing larger market moves over a longer timeframe.

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