What Is Intraday Meaning and How to Do It?

What is the intraday meaning definition? For those of you who don’t know, “intra” is a prefix meaning within. Hence, intraday means within the day. As far as stock trading is concerned, this means you’re buying and selling stocks within the same trading day. This is often done by day traders.

With intraday trading, the goal is not to invest. The goal is to profit off quick movements in stock prices each day. And profit people do. So much in fact, millions of traders are lured into trading with the promise of lucrative returns.

But, the fact is, you need to know what to look for if you ever want to reap those returns. So keep your eyes glued, and I’ll show you want to look for, so those returns end up in your pocket.

Intraday Meaning Defined

  • What is the Intraday meaning? Like I mentioned above, intraday means “within the day.” So as an intraday trader, you trade within the day during regular market hours. For those of you who trade on the New York Stock Exchange – one of the largest stock exchanges in the world, the regular trading hours are from 9:30 am to 4:00 pm local time. Generally, the best time to day trade the stock market is the first hour after the open, from 9:30 am EST to 10:30 am EST and the last hour of the day from 3:00 pm – 4:00 pm EST. Check out our stock market hours post for a complete breakdown of the trading times.

The most commonly traded securities are stocks and exchange-traded funds (ETFs). Because trades are opened and closed within the same day, you must pick the right stocks.

Besides, you’re only as good as the stocks you trade. Despite having the best trading strategies in the world, if your stocks don’t move or have low volume, you’re not going to be making money consistently. 

Or, you could be just starting out and completely overwhelmed at the thousands of stocks available to trade. Luckily, picking the right stocks is easy if you follow the tips below.

Essential Things to Know If You Want to Trade Stocks Intraday

  1. Pick easy to sell stocks (lots of volume, liquidity)
  2. High volume stocks are key because it’s easier to get a fill, and the stock will have a good ATR (average true range)
  3. Pay attention to relative volume. Higher relative volume is shows more activity than usual.
  4. Pick low float stocks

Pick Stocks That Are Easy to Sell

In other words, high liquidity stocks. Even if a stock is at a rock bottom price and you think it’s a steal of a deal, be careful; if something seems too good to be true, it probably is.

You need to make sure you pick a high liquidity stock. If there are no buyers for your stock, you might be stuck holding onto something no one wants and, you might face a loss. Read our post on how to avoid the pump and dump trap. It doesn’t matter if you know the intraday meaning if you fall for the pump and dump.

Pick Stocks With High Volume

Intraday Meaning

Do you know what happens when the volume isn’t there? The answer is slippage, slippage happens. 

If the volume isn’t there, you’ll end up with a very wide bid-ask spread. Needless to say, it means getting the best price is next to impossible.

To emphasize it could mean paying 5% to 15% extra just for the illiquidity. For these reasons, whether it is ETFs or stocks, you must pay attention to the volume.

Sometimes sectors have high volume which grabs the attention of traders. However, just because a sector like marijuana is ripping doesn’t mean all potstocks are running.

Pay Attention to the Relative Volume (ROVL) as Well 

Displayed as a ratio, RVOL compares the current volume to normal volume for the same time of day. For example, a stock trading ten times its normal volume would have a relative volume of ten.

As intraday traders, we want the RVOL at two or higher coupled with a positive catalyst – think news, positive drug trial, etc.

Generally speaking, almost every winning intraday trade is high in relative volume that day compared to its average volume. 

Remember the trend is your friend. So trend trading strategies are incredibly helpful. 

Pick Low Float Stocks

Float, by definition, is the number of shares available to trade on the open market. When it comes to momentum trading, the lower the float, the better.

It’s these low float stocks that will move and move quickly due to their low liquidity. However, I must warn you; The lower the float, the more potential it has to do something nuts. For these reasons, stick with a float greater than 300,000.

Intraday Meaning and Trading Strategies

  1. For those of you interested in trading intraday, you have several strategies available to you. A quick glance below, you can see these strategies include:
  2. Scalping. Scalpers try to make many small profits on small price changes throughout the day. Specifically, scalpers look to take advantage of changes in a security’s bid-ask spread and have to work quickly to make many small trades. Typically, intraday scalping uses one- and five-minute charts for high-speed trading. She may buy at $15.25, sell at $15.50, and buy again at $15.30. Especially on slow days, many intraday traders rely heavily on scalping. But it’s essential to have low commission costs, or your profits can quickly be eaten up by your brokerage firm. Done right though, it’s a great way to make some steady profits. 
  3. Range trading. One common strategy for intraday traders is trading the opening range breakout or the first 20 to 30-minutes of the market opening.
  4. News-based trading. Trading stocks based on news is one of the oldest intraday trading strategies around. By choosing stocks that are sensitive to news, we can capitalize on the heightened volatility around news events. We often see these moves after the news (i.e. positive results in a cancer trial). 
  5. High-frequency trading strategies. In short, they use sophisticated algorithms to exploit small or short-term market inefficiencies
  6. Tick Index monitoring to spot intraday trading entries is helpful to improve the timing of your trade.
  7. Watch for particular patterns to trade. The failed bear flag strategy is amazing.

Luckily with Bullish Bears, we trade a variety of different strategies, and we can help you pick the one that’s right for you. In fact, we talk about them all in our live trade room.

Key Takeaways

  • Intraday is shorthand for trading securities based on their price movements during regular market hours.
  • A Day Trader will pay close attention to price movements to capitalize on short-term price fluctuations.
  • Scalping, range trading, and news-based trading are a few of the different types of intraday strategies used.

Intraday Meaning Conclusion

Undoubtedly, it requires dedication, hard work, patience, quick wit, and the desire to learn if you want success in intraday trading.

To a large extent, successful day trading involves 10% execution and 90% patience. If you want to gain expertise in day trading, hone your trading skills and keep money in your pocket, sign up with Bullish Bears now. 

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