Intraday Trading vs Long-Term Investing: Choosing Your Investing Approach

Stock market trading vs investing is a debatable topic. Through stock trading, you can earn daily income, whereas long-term investing helps you to create wealth and achieve long-term goals like buying a home, child education, etc. In this article, we will understand both types of approaches and discuss the differences between stock trading and investing.

What is Intraday Trading?

Intraday trading is also known as day trading. Intraday trading means buying and selling stocks within the same day before the market closes.

As the buy-sell of securities takes place on the same day, so you don’t take the delivery of stocks. However, you need knowledge and skills to make a profit and it is comparatively riskier than stock investing. Understanding technical analysis and related tools can help you make profits from stock trading

What is Long-term Investing?

Long-term investing means buying the stock and holding it for a longer period such as months or years.

For long-term investing, you need to research the company and its financial performance before investing. You can do so by fundamental analysis of a company.

This is a great way to save for your long-term goals. This is also less risky because staying invested for the long term eliminates the short-term impact of volatility.

Intraday Vs Long-term Investing

Intraday and Long-term investing are two different approaches. Let’s go through them in detail.

 Intraday TradingLong Term Investing
Holding periodYou need to square off the position on the same day.You hold the stock for months or years.
Risk InvolvedIt is quite risky.It has a comparatively low risk.
Time CommitmentYou need to give a few hours every day. You don’t need to do close observation on a regular basis. However, regular monitoring and rebalancing are needed.
Skills RequiredIntraday traders need to make quick decisions. They need to observe price movements and take advantage of them. You need to learn technical analysis to make a profit from intraday tradingYou shall be able to conduct fundamental analysis to make a profit from long-term investing. 
CostAs you undertake multiple transactions in a single day, the brokerage can be on the higher side.Lower cost is involved as you hold the stock for a longer period—so lower brokerage expenses.
TaxationShort-term capital gain (STCG) is applied for taxation purposes.If the stock is held for more than a year, long-term capital gain (LTCG) is applied, which is lower than STCG.
Stock SelectionHere the main focus is on quick returns. Due to this, the stocks with higher volatility are selected to make higher gains.You need to select the stocks very carefully. They shall have strong fundamentals and can give huge returns in the long run.


Both intraday trading and long-term investing can make you money. Whether to invest for the long-term or indulge in intraday trading depends on your financial goals, risk appetite, investment period, etc.

If you are planning to start with any of these, you can open an account with Dhan, one of the best online stock trading platform in India.

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