What is intraday? For the purpose of discussion, let’s agree that when we say “intraday” we mean opening positions and exiting the same positions within the same day.

So why intraday strategies for a start then?

#1 More technical analysis than fundamental analysis

Intraday strategies typically focus more technical analysis then fundamental analysis. Whether support/resistance or trendlines are broken, whether there are breakouts from a range, flag, triangle etc. Well, we all know that good trading analysis involves both technical and fundamental analysis. Technical analysis is somewhat similar be it later on we decide to trade stocks, options, forex or futures. However, for fundamental analysis, this is instrument specific. We cannot be analyzing the fundamentals affecting the EUR/USD currency pair to decide if it is bull or bear for the E-Mini Russell futures or analyzing the fundamentals affecting GOOG stock for deciding whether it is bull or bear for LEH, can’t we? So, in my opinion, it is wise to learn technical analysis first then zoom in to the instrument that we want to focus on for fundamental analysis.
#2 Learn how to enter and exit from the market well

Must we learn technical analysis? Certainly! Technical analysis helps us determine what type of a market we are in (eg, bull, bear, sideways) and to pin-point good entry and exit points. Especially for intraday strategies, the results of good entry and exit points are amplified. It is more obvious as the few ticks difference makes a difference during intraday trading. So we can sharpen our entry and exit skills.

#3 We can practise our trading skills more regularly

With intraday trading, we can expect several setups to trade every day, giving us opportunities daily to hon our skills. We close our trades before the end of the day and we can tabulate our daily performance from there. In contrast, compare this with the longest term value investing, where you can only see results after a year or two or even longer. Ok, that is more drastic. How about short term strategies based on earnings announcements? Earnings announcements that are useful don’t happen everyday. Earnings season happens four times in a year. Of course, after all the practising, we may feel that intraday trading is not our style. But the foundation is the same! You can move on to trade in different timeframes with the same set of skills!
#4 We will not lose heart so easily

Human beings are an anxious lot. We like to see action and results fast. If not, we might lose steam and end up giving it up altogether. Some courses teach 8 strategies, which strategies do you think most people start off with?

#5 Instrument-specific risks for longer term trades

For forex, there is the rollover risk when we hold our positions overnight. For futures, a much higher initial is required as well. For options, if not deployed properly, will be subjected to time decay (lose option value over time) if we hold the positions for a long time.

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