Day trading is one of the strategies to make money in online stock trades. But when considered to the other trading strategies it is not relatively safe to trade in stocks using day trading. In this article, I will explain you why it is so.
In day trading, the benefit you get is you get more exposure limit for buying stocks, even if you have less money. The limit will depend on the money which you have in your account. By this benefit, traders take huge risk and exposure in the stocks which is really unsafe to play with it. You also get less brokerage for day trading when compared to cash trading.
Why i say day trading is not safe is because, the market will fluctuate a lot in a day. The markets may open in green and you might take good position in some stocks, suddenly some bad news may come regarding the company in which you have taken position or the finance minister may announce some news which might affect the stock market or the other markets like European markets may open in red or weak due to the situations there which might lead to the downfall of the Indian markets suddenly, which will result in heavy loss as we might have taken a huge exposure in stocks. In case of cash trading, we can even hold the stocks in demat for more time till the market recovers or can hold it till we get a good price. But here, we have to sell the shares before the market closes or it will be automatically sold booking more loss.
So it is not advisable to go for day trading unless you have good experience in it. You may also read more from this link.