Risks Associated with Intraday Trading
1. Market Volatility Risk: Market volatility risk is defined by high price movements and market unpredictability. This risk refers to the probability of loss as a result of adverse and unexpected market developments affecting stock prices. After selecting the best stocks and employing appropriate trading tactics, market swings risk may persist. This risk is manageable (by investing in stocks of established businesses with a history of stability), but not controlled.
2. Addictive: Intraday traders are frequently misled by their emotions, which drive them to take risks they cannot afford. Many traders make the mistake of following their gut feelings and excessive trading in the pursuit of larger earnings. Because intraday trading is focused on speculating on stock price movements, psychological addiction to trading may result in compulsive gambling. Extreme competitiveness, worrying over previous losses, and dismissing the hazards involved are all signs of a neurological addiction to intraday trading.
3. Challenging: Intraday trading is a difficult talent to master. Furthermore, compared to long-term or positional trading, you cannot exit the mobile app before closing a position. Although you can set a target and a stop loss prior resuming to your full-time employment, this technique is not sustainable in the long run. An investment might cross the stop loss without achieving the objective in rare instances.