When buying and selling stocks in the same trading day, and all positions are closed before the market closes for that particular day, this is known as intraday trading. In the stock market today, you can use different methods for trading stocks within the same trading day. These methods will help you to take advantage of stock picks that you have chosen for investing. The frequency at which you buy and sell stocks can vary, and some traders may trade stocks and hold them for a day, hours, or even minutes. Some traders may hold stocks for a few seconds.
When a trader takes advantage of the small price gaps that are created by the bid-ask spread of his stock pick, this is known as scalping. Once the stock is bought, it is usually held for no more than a few minutes or seconds, and then it is liquidated. By trading stocks in this manner, a trader will seek to take advantage of the market when its volatility has increased and the trading range has gotten bigger. To determine at which point to enter and exit the market, they will use technical analysis to identify support and resistance areas. This will allow them to make profits on the small movements that occur.
Another method used in intraday trading is what is known as shaving. This style allows the trader to jump ahead in to a stock at only a tenth of a cent. Typically, he will make himself the best bid by offering a tenth of a cent more than the actual bid. This will put him first in line to get the stock. Simultaneously, he will make his offer more lucrative by selling at a tenth of a cent cheaper than the offer price of the stock; again, this will put him first in line to sell. All of this will take place in a matter of seconds. To make it beneficial, the amounts used will have to be large share blocks. They will also profit from rebates because they will be creating liquidity in the stocks.
These are just a couple of examples that traders use during intraday trading to maximize profits. Stock picking is an art and requires the use of chart analysis to identify the support and resistance points so that an entry or exit can be done in a timely manner. There are many other stock tips for day trading that you can learn in order to give yourself the best chances of winning on the stock market.