| When traders buy and sell stock throughout the day | | | | reversal may occur. Intraday trading using the |
| and close all their positions by the end of the same | | | | momentum technique can see the trader hold onto a |
| trading day, it is known as intraday trading. Intraday | | | | stock for a few minutes to a day depending on how |
| traders will look to make profits from small price | | | | the stock moves. The trader will look to identify a |
| movements in a stock by using leverage or margins. | | | | break out, which is his signal to buy the stock. Hitting |
| The length of time that an intraday trader holds a | | | | the bid price is not so important, and a trader may |
| stock can be from a few seconds to a day. Trading | | | | let a few breakouts pass by before he gets in |
| stocks like this requires large amounts of capital to | | | | through market order. If the stock should suddenly |
| be invested in stock picks so that the small | | | | reverse its direction, the trader will sell out |
| movement in price makes it worthwhile. There are | | | | immediately and cut his losses. They do not wait to |
| many types of strategies that intraday traders may | | | | see if the stock will go up again; this could prove |
| use to trade on the stock market. | | | | risky and see them lose money. |
| Scalping is a style of investing that is very popular in | | | | Technical trading is yet another type of intraday |
| intraday trading. It involves selling a stock pick nearly | | | | trading. Traders who use this technique look at |
| immediately the trade turns profitable. This occurs | | | | technical analysis to determine what direction the |
| after the stock increases by just a few cents. It | | | | stock or stock market will move in. They perform |
| may not seem much, but done a number of times | | | | chart analysis on stock charts and historical data on |
| and with large amounts of capital, it soon adds up | | | | price and volumes of a particular stock. They then |
| while at the same time maintaining a strict exit | | | | look to identify similarities in the way the stock |
| strategy to limit your losses. | | | | traded in the past with the present. By doing this, |
| Momentum trading involves stock picking shares that | | | | they look to find areas where a stock may reverse |
| are moving in a significant direction on high volume. | | | | its direction. These traders use various technical |
| Traders look to take advantage of the stock picks | | | | indicators to help them predict how the stock price |
| momentum and ride it out up until the point where a | | | | will move in a few minutes to a few hours. |