Intraday trading entails executing both the legs (buying and selling) of the transaction on the same day. This is ideal for traders who can handle volatility. An intraday trader has just 5-6 hours to execute both sides of the trade. It is critical that an intraday trader has some specific attributes.
Prepared to put up with bouts of volatility
Intraday trading is, by default, fraught with volatility that could be driven by news or by trader action. An intraday trader must have the capacity to handle risk without panicking. When you panic, you subsidize the other trader who does not panic.
Willing to trade with stop losses and profit targets
Intraday trading is a lot about discipline. You need to protect your downside risk with stop losses and take money off the table by booking profits. The discipline to adhere is that once the levels are reached, never have second thoughts.
Uncanny ability to focus on protecting capital
Unlike what many believe, an intraday trader spends a lot of time on risk management. You must be able to protect your capital daily, weekly, and overall. When the capital limits are reached, be disciplined not to stretch your luck any further.
Willing to adhere to capital churning discipline
This is where the mindset of an intraday trader must be totally different from an investor. An Intraday trader must entirely focus on turning around the capital as quickly as possible in a profitable manner so that the ROI can be enhanced.
Self-driven and typically well-researched
This is an important quality for an intraday trader. An intraday trader cannot afford to depend on calls and trading ideas from others. He/she must focus on gathering information, distilling insights, reading charts, and taking his/her own trading decisions quickly.
Capacity to handle multiple data streams
An intraday trader has to be a quality analyst too. For successful intraday trading, there is the need to combine charts, levels, breakouts, news flows, announcements, macro shifts, global flows, and F&O data. A credible intraday view can only be formed when all these parameters are considered.