How Intraday Trading Works?

Also known as day trading, Intraday Trading is the first choice trading segment for beginners. To make money from day trading, one should have an idea of how intraday trading works.

Among all, intraday trading is the shortest trading option and has a span of just a single day. 

Thus one can trade i.e. buy or sell stock within the same trading session. 

The age of digitization has made trading easy, and many turn to intraday trading for making an additional income.

However, day trading isn’t all that easy as it seems and requires the trader to have at least a basic knowledge of the intraday trading rules, risks, mechanisms that form a part of the intraday trading process.

Before we get to the point, we learn about what all forms the process; we should know what Intraday Trading actually means. In fact, at Stock Pathshala, we have multiple stock market courses around it.

Intraday Trading Meaning

As the name suggests, Intraday trading simply means “trading within a day.” An intraday trade means that the purchasing and selling of stock are carried out within the span of the trading hours of the stock market. 

Financial securities that can be intraday traded include – stocks, commodities, derivatives, ETFs, mutual funds, etc. The basic idea of intraday trading is to purchase a stock or set of stocks and later sell it at a higher price during the day.  

In day trading, the trader studies and evaluates stock movements, make predictions on stock prices, and looks to make profits due to fluctuations in price movements of stocks. The trader will purchase a stock earlier in the day and sell the same stock before the market closes.

Intraday trading requires a trader to have quick decision-making capability. If the trader doesn’t act quickly, intraday trading’s fast-moving nature can see the trader miss out on the chance to make profits or, worse, register losses.

Requirements For Intraday Trading

To win in intraday trading, a trader has to have the right mix of knowledge, tools, strategy. In addition, the trader needs to develop some traits as well. Intraday traders need to have immense risk-taking and quick decision-making ability.

Also, once you get into day trading, you will be required to keep a close watch on the stocks trending and rising in the stock market. 

The idea of intraday trading seems simple. But in reality, it demands time as successful intraday trading involves adoption and following the right strategies and plans. 

Following are the requirements for gaining success in intraday trading:

1. Stock Market Knowledge

Getting into intraday trading, which is considered to be the most volatile trading segment of the stock market, without having at least a basic knowledge of the operations of the stock market, is a sure shot plan to failure.

Learn about the stock market, the various types of stockbrokers, and whether their brokerage services suit your investment plans.

There is a long list of securities to choose from, and one shouldn’t get into trading without learning about your options. 

Intraday trading requires traders to study graphs, charts, stock price trends while taking the help of various intraday trading indicators and oscillators. Further, a trader will need to conduct a fundamental analysis of stocks to make more accurate trading decisions. 

Thus, gaining an understanding of the stock market, intraday trading stocks, elements such as graphs, charts, patterns, etc. is important for beginning on the day trading journey.

2. Stockbroker for Intraday Trading

Among the first things, anyone who wants to get into intraday trading will require is a trading and a demat account with a SEBI registered stockbroker. There are mainly two types of stockbrokers, that is – full-service stockbroker and a discount stockbroker.

Choosing the right stockbroker is crucial for an intraday trader in order to get heavy returns on their trades.

An intraday trader will be required to make multiple purchases every day, so ideally, they should opt for a stockbroker who charges minimal brokerage fees and offers quick order fulfillment.

In addition to low brokerage charges, day traders should look for a stockbroker that offers services such as customer support, reliable research tips, recommendations, technical assistance. 

3. Choose a Winning Stock For Intraday Trading

The next step after a trader has settled for a stockbroker is to select a stock or set of stocks to carry out intraday trading. While selecting stocks, a trader should look at the available stocks across various sectors and also keep a look at their liquidity.

Since intraday trading is highly inconsistent, traders should look to invest in multiple stocks across different sectors to have a cushion against any unpredicted stock market fall.

Also, the best bet for intraday traders is to select liquid stocks. A stock with higher liquidity is greater ease in trading. In general, when it comes to liquidity high-cap stocks are relatively more liquid than small and mid-cap stocks. 

4. Intraday Trading Strategy

Choosing the right stock is only half the job done. Next comes the execution part. The success of a trade is greatly dependent on the type of intraday strategy employed by the trader. 

Even after all the knowledge, the first time intraday traders will face many difficulties in executing orders or making the right move at the right time because a certain strategy might work on a particular day under specific circumstances, but will completely fail on the other instance. 

Thus, traders should learn to employ multiple intraday strategies to make profits in different stock market conditions. A trader should, therefore, keep learning as many strategies, continually enhancing their trading skills.

5. Tools For Intraday Trading

Intraday trading is definitely not a cakewalk and requires a lot of hard work. But an intraday trader’s life is made easy by various tools at their disposal. Traders can employ these tools for carrying out trade more efficiently.

Tools such as an intraday trading platform offer a great amount of assistance to the day trader. A trader can get access to in-depth and real-time data of the stock market, such as price trends, the trade volume, etc. 

These ensure faster transactions for traders and ease of accessibility, which is greatly valued by day traders.

Then there are tools such as intraday trading charts that help traders gain an understanding of the price movements of stocks. These charts depict a stock’s highs, lows over a certain period of time.

In addition, an intraday trader also is helped by the various intraday trading technical indicators such as moving averages, Bollinger bands, the stochastic oscillator, Relative Strength Index.  

All these tools help intraday traders in making sound trading decisions. 

Intraday Trading Tips

Apart from this to experience the win-win situation, here are some of the tips that give you success in intraday trading. 

1. Freeze Entry and Exit Price

Most of the time, due to lack of knowledge or by getting influenced by other traders, buyers often make a wrong decision and enter into the trade by buying the wrong stock.

In order to prevent yourself from such losses, do a complete analysis to decide the entry and exit price before taking a position. 

This will help you to get a clear objective and end up in a trade that helps you earn a good profit. 

2. Make Use of Stop Loss

Since intraday trading is quite risky, stop loss plays a very significant role.

It is therefore important to decide the maximum low price of the stock that you can afford if the stock price falls before the square-off position. Using the stop-loss strategically minimizes your losses during day trade. 

If you are a beginner, then it is good to follow the 3:1 rewards to risk ratio. This signifies that the exit price while loss should be three times lower than the exit price at which you are willing to book profit. 

3. Book Your Profit Once Target is Reached

The mantra behind the successful intraday trading is high leverage and margin/ This helps in amplifying profits.

But although margin money gives you the opportunity to trade with the limited fund still it is good not to be too greedy and adjust the stop loss on the basis of your analysis.

4. Close Your Open Positions

When the trader does not get the right price for their stock, they usually opt for the delivery of shares but doing so is not a good option as the stock you pick for the day trading was analyzed on the technical parameters.

Therefore they might not prove to be fruitful for the long-term investment. It is good to go for the fundamental analysis before switching your ideas and plans. 

5. Understand the Market Trend

Most often traders remain overconfident seeing the market trends, especially when the stock is bullish.

This rise their expectation of earning more profit, but this not always proves to be the right decision as most of the time your analysis might go wrong. So, as the trend reverses, it is good to exit to keep yourself away from loss. 

6. Timing is Crucial for Day Trading 

While doing intraday trading, it is good to avoid the first hour of trading to pick stocks, as the first few hours are highly volatile. It is better to trade between noon and 1 PM. 

7. Choose Right Platform

Next comes the platform that you choose to do analysis and picking stocks.

Picking the right stock helps you to make a quick decision, execution of an order at the minimal brokerage. 


Conclusion

Intraday trading has a strange charm and sees an ever-increasing number of people venture into the domain on a routine. This form of trading happens within a day, making it a place for earning quick profits.

Intraday might be the shortest trading option in terms of duration. However, it is also the most risk-prone of all the trading options. Intraday trading is different from delivery trading as intraday trading doesn’t involve ownership transfer of stocks. 

Traders need to consider a lot while deciding the right stockbroker and a winning stock for day trading. Stock selection usually consumes a lot of time but is just as important part of the process.

Also, traders can assist tools such as trading platforms, intraday trading charts, and intraday trading technical indicators, which helps them make a more refined trading decision. 

 

Intraday Trading Indicators

Day traders require to study a lot of charts, graphs, patterns for carrying out a technical analysis of the stock to make a profit on their trades. Traders employ various Intraday Trading Indicators to gain information such as price movements, price trends, which form a part of the technical analysis of stocks. 

Intraday traders make money by harnessing the stock market volatility.

The stock market prices go up and down every day, and traders need these Intraday trading indicators to make assumptions about the price trends, volume trends of a certain stock.

Top Intraday Trading Indicators

These indicators assist a trader in dividing a strategy to maximize the profits on a trade.

These indicators help an intraday trader to grow a better understanding of the market conditions. Intraday indicators, thereby, assist a trader in planning their trading strategy accordingly. 

Learn more about Intraday Trading Strategies.

We discuss some of the most common Intraday Trading Indicators :

1. Moving Average Convergence Divergence

Moving Average Convergence Divergence is a momentum indicator and is one of the most insightful Intraday Trading Indicators that helps traders, analysts about an imminent reversal in trend.

The indicator shows a comparison between two exponential moving averages of a specific stock’s price. There are two moving averages of different periods, one of 26 days and the other moving average is 12 days. 

MACD is obtained by subtracting the two moving averages of the stock prices. The resulting MACD assists in plotting the MACD line. 

Intraday Trading Indicators

Further, a 9-day EMA called the Signal Line is plotted. An increase in MACD spread is indicative of a rise in stock price, and a decrease in the MACD value tells that the prices of a certain stock are falling. 

In case the MACD line crosses above the Signal Line, it automatically sends a “Buy Signal,” which tells that the time is right to purchase the stock. 

Similarly, it sends a “Sell Signal” when the MACD line falls below the signal line. A “Sell Signal” alerts the intraday trader to sell the stock.

By the way, do you know how intraday trading works? You should learn about it.

2. Bollinger Bands 

Developed by John Bollinger, the widely acclaimed financial analyst, Bollinger Bands is a technical analysis tool that helps traders ascertain whether the stock is in an overbought or oversold condition. 

The Bollinger Bands consist of 3 trendlines – the upper band, the lower band, and the Simple Moving Average line (SMA). Usually, the stock prices tend to stay between the two price bands.

Intraday Trading Indicators

Also, Bollinger Bands reveal a market’s volatility. 

The wider the bands are, the more volatile the market is. And, narrow bands indicate a lesser volatile market. 

When the stock prices are closer to the upper band, the market is believed to be overbought, and the market is oversold when the prices move closer to the lower band.

The reason Bollinger Bands indicator has risen to be one of the go-to indicators among analysts is its unrivaled accuracy of nearly 80%. 

3. On-Balance Volume

On-Balance Volume is one of the classic Intraday Trading Indicators that uses volume flow to predict the price movement of a stock.

On-Balance Volume, created by Joseph Granville, also has the distinction of being among the earliest indicators that helped traders measure positive and negative volume flow. 

The OBV indicator is cumulative by nature, and having its actual value is not necessary.

Intraday Trading IndicatorsOBV is employed by traders, analysts as a tool to confirm stock price movements. The indicator tends to help traders to identify the perfect opportunity to buy stocks by going against the current trend.

The value of OBV is obtained by aggregating the volume on up days to measure the purchasing pressure and subtracting the volumes on down days to get an idea of the selling pressure.

4. Relative Strength Index Indicator 

Relative Strength Index Indicator (RSI) is a momentum indicator that depicts the strength of a stock price. The Relative Strength Index Indicator is often employed by analysts to check the demand and supply of stock. 

In other words, this indicator measures the speed of stock price movements. The indicator has an index range of 0 to 100. When the indicator displays a reading of above 70, this points towards an overbought market. 

On the contrary, an RSI reading below 30 is indicative of an oversold market.

Intraday Trading Indicators

Analysts make use of the RSI indicator to predict a reversal in a particular trend.

A reading above 70 for a stock indicates that the stock is overbought and may not be sold. Likewise, a reading of 30 is indicative of a stock’s ability to be sold at a price lower than its actual value. 

5. Stochastic Oscillator

Stochastic Oscillator is one of the top Intraday Trading Indicators that serves the purpose of comparing the closing price of certain security to its prices ranging over specified time periods. This indicator, instead of measuring the price or volume, tracks the momentum of stocks.  

As the momentum of a stock tends to move earlier than the price of a stock.

Just like the RSI, the Stochastic Oscillator also is a range-based indicator and has a range of 0 to 100.

Intraday Trading IndicatorsSimilarly, this indicator is useful in ascertaining whether the stock is being bought at a price higher than its real value (overbought conditions) or the stock is in an oversold condition. 

A reading of and above 80 depicts overbought market conditions, and readings of 20 and lower tell of an oversold market. The stochastic oscillator is comparatively slower and yet accurate than the Relative Strength Index Indicator.


Conclusion

Intraday trading indicators are used by traders to gain information such as price trends, price movements, which help a trader in making a refined trading decision. 

These indicators speak about the potential of trading in a stock.

At the same time, these intraday indicators offer no guarantee about a stock’s performance but help a trader significantly in making the right move at the right time.

MACD Intraday indicator helps a trader in trading decisions through “BUY” and “SELL” signals, while Bollinger Bands tell about the market volatility and whether stocks are in ideal conditions to be bought or sold.

Since day trading is inconsistent and traders opt for any sort of help that they can receive to make profits. Intraday trading indicators certainly deliver on that front.

Stock Pathshala provides an array of stock market courses that you must check out before you delve into the ocean of share market trading.

Intraday Trading Examples

Traders are a fan of the Intraday trading segment because of its quick money-making abilities. We needn’t even run a poll to prove this. Traders who choose to test themselves in intraday waters would love to learn through Intraday Trading Examples.

Also known as Day Trading, the whole trading span of the intraday trading is limited to a single day.

The idea remains that financial security (stocks, commodities, derivatives, currency) is first purchased and later sold at a price higher than its purchase price.

Traders can learn through intraday trading examples how to leverage the stock market volatility that is fluctuations in stock prices to make profits by taking positions in stocks for a price lesser than the particular stock’s value and close all the positions later in the day before the stock market closes. 

This process of closing all open positions on a stock before the market closes is called “Squaring Off”.

Intraday traders square off their positions, that is the traders that have purchased stocks must sell and those who have sold must buy at the end of the day.  

But, all this looks easier on paper than actually having to do it in real life. Therefore, we dedicate this article to the task of providing a practical lesson on how to trade using Intraday Trading Examples:

Intraday Trading With Example

For executing Intraday trading, traders need to be well versed with the various intraday trading orders. What looks like a simple task to many, the trading process will require a trader to make several orders. We talk of every such order provided with Intraday Trading examples.

The trading process doesn’t only consist of the purchase and selling of the stock. There are various orders that a trader will have to implement in order to efficiently trade and make profits by trading on stock markets. 

The list of various types of Intraday orders consists of – Market Order, Limit Order, Stop Order, Stop Limit Order, etc. So, it becomes important to learn about the types of intraday orders, the purposes they all serve, and how and when to place them.

Also Read: Intraday Trading Rules

Market Order

When a “Market Order” is placed it means that the trader wants to purchase or sell a particular stock. The trader instructs the stockbroker to immediately purchase or sell the stock at the available price. 

The stock market moves quickly, rather too quickly sometimes for a trader’s liking. Traders need to move just as quickly and place their orders at the right time as soon as they see an opportunity rise, hence, the market orders need to be fulfilled immediately. 

Example of Market Order –  When a trader places a market order to purchase 100 shares of Airtel, the stockbroker instantly credits 100 shares of the stock in the trader’s Demat account. 

Also, traders should have a look at the stock’s liquidity before placing the market orders. As stocks that have comparatively high liquidity tend to enjoy higher ease in trading transactions.

Limit Order 

When a trader places a Limit Order, it depicts that the trader has set a particular limit for selling a stock. The stock automatically gets sold as soon as the stock reaches the price. 

A Buy Limit Order placed by the traders gets fulfilled at the mentioned limit price or lower, whereas a Sell Limit Order gets automatically executed at a specified limit price or higher. 

Here is one of the Intraday Trading Examples within a limit order:

Example – A trader wants to purchase TATA stocks currently available at a price of Rs 200. The trader believes the prices are too high for his liking and thus decides to wait on the stock and places a Buy limit order at Rs 195. 

The stock price does eventually fall to ₹195, and the Buy Limit order gets executed. Once the trader has his stock, he places a Sell Limit Order at Rs 200. 

The order will only get executed if the stock price again fluctuates upwards of Rs 200 or higher. 

Stop Order

A trader places Stop Orders to purchase or sell a stock after its price fluctuates past a particular price. By placing a Stop Order, the trader safeguards himself against losses and also secures the profits.

The order remains inactive until the stock reaches the specified stop price. The trader would ideally place a Buy Stop Order at a price above the current market price in an attempt to gain the maximum profits. 

Similarly, the trader places a Sell Stop Order at a price below the current price of the stock as a measure against incurring losses. The order gets fulfilled automatically as soon as the stock touches the stop price.

Let’s take a quick look at this Intraday Trading Example:

Example – A trader owns a stock that has a current value of Rs 100. The trader then places a stop order to instruct the stockbroker to sell the stock for Rs 98. 

In case, the price comes down to Rs 98 or even lower, the stop order gets executed as a market order to sell the stock. The stock automatically gets sold at the best available price at the time of the trade. 

Stop Loss Order

A trader places a Stop Loss order with a stockbroker to purchase or sell a stock as soon as it reaches a particular price. The stop-loss order is employed by traders to limit their losses. 

Before placing a Stop Loss order, the trader needs to decide a stop price. The stop price shouldn’t be set too close to the current price as the market fluctuations can lead to unnecessary activation of the orders.  

Example – A trader holds a position on a share whose value is Rs 100 that is bullish. But if the trend reverses, in that case, the trader can make use of the stop loss. This minimizes the loss and helps him to exit the trade at the right time. 

So here, let’s consider that the trader set the stop loss at ₹95. 

Through this order, the trader has instructed the stockbroker to sell the stock the very moment the stock price comes down to Rs 95. This protects the profits for the trader and saves him from incurring major losses.

Stop Limit Order

Stop Limit Order is the type of order that provides the traders the best of both a stop order and a limit order. The stop-limit combines stop order and limit order, which means that a trader can set a stop price as well as a limit price on his order, 

However, in stop-limit, the order becomes a “limit order” as soon as the stock price hits the target price. This is completely in contrast to the stop-loss order, which gets executed as a market order once a target price is met.

Example – A company’s stock is valued at Rs 100 and the trader expects it to rise. The trader sets a stop price at Rs 120. In case of a stop order, the order would get executed as a market order once the stock price reaches Rs 120. 

However, in a stop-limit order, a trader can also set a limit price on the order.

The trader sets a limit price of Rs 125, which is the most that the trader is willing to pay for the stock. The order only gets placed if the stock does reach the stop price at Rs 120. Otherwise, the order does not get executed.


Conclusion

Intraday is probably the most exciting trading game.

Such is its charm, that Intraday trading is also the most populous of all the trading segments. Many aspiring traders who see day trading as a way to make some quick money face challenges when they first start out trading.

However, those challenges can be reduced when and if the inexperienced trader learns about what all constitutes the process to place an intraday order. Intraday trading examples will teach traders the way around in day trading, and help execute intraday trades effectively.

The seemingly simple process of intraday trading involves the placement of various orders. Thus, the trader must be aware of their purposes, how to place them to get the maximum profit, and likewise limiting losses. 

 

Intraday Trading Rules

Day trading just like anything has its own set of rules that traders need to follow. These intraday trading rules are the ones that stand responsible for a trader’s performance in the stock market.

Abiding by these rules is not necessary by any means, however, following these will help a trader get the best out of their day trades. 

Intraday is hugely popular among beginners and experienced traders alike. Along with being the shortest format of trading in the stock market it also is the riskiest trading segment. 

Intraday Trading Rules in India

Traders, especially the one trading for the first time tend to lose money more often, rather than making profits. Thus, it is advisable to be well aware of certain intraday trading rules. 

Here in this article, we take a look at some of them : 

1. Choose The Right Broker

The first and foremost step for a trader to get into intraday trading on the stock market is to have a trading account with a stockbroker. The traders have a host of options in terms of the variety of stockbrokers. 

However, finding the one that suits your trading needs is important to an investor’s cause. Having a stockbroker that provides facilities such as research tips, recommendations, market reports, charting tools, etc. 

This is one of the most important Intraday Trading Rules you should ideally be aware of and use in practice.

Learn more: Intraday Trading Tips

2. Research Trends

Trading just like any exam requires a revision of yearly books, notes to perform on the day of the exam. In order to execute an intraday trade, a trader needs to perform thorough research on stocks by studying the various charts to predict price trends.

Intraday traders should look to invest in stocks based on their performance in recent times. The stock prices keep varying all the time, thus, staying updated with the stock price trends is critical for carrying out intraday trades.

3. Businesses Over Stocks

An unknown yet high performing stock might emerge out of nowhere and may even get a lot of attention from traders. However, a wise intraday trader will never fall for such stocks. 

A wise intraday trader will always as a rule choose the stock of a well-established business rather than the well-performing stock of a relatively unknown company. 

Even if it is an unknown company make sure to do in-depth research on the company’s history, its stock offerings, data that may help in understanding the business better.

Remember this Intraday Trading Rule and you will never fail!

By the way, do you know how intraday trading works? You should learn about it.

4. Control Emotions 

Intraday trading isn’t exactly a place for emotions or rather decisions driven by emotions. Emotions tend to lengthen the thought process of an investor. An intraday trader can’t afford any delay in decision making. 

A trader might fear losses or feel greedy about making bigger profits, and want to reconsider his decisions, losing crucial time in the process. The intraday market moves so fastly that it requires a trader to act quickly on any opportunity he sees.

Any delay will see a trader lose out on potential profits.

5. Never Forget A Stop-Loss Order 

A trader might go into intraday trading with the motive of making profits on their investments, but it is just as crucial to be a little cautious of losses as well.

A stop-loss order helps a trader keep a check on losses. A trader sets a price after which the stock is automatically bought or sold. This ensures the trader doesn’t lose money more than he can afford to, while also protecting the trader’s profits.

Having a stop-loss order should therefore not be overlooked.

6. Trade With Surplus Money 

Another Day trading rule would be to never trade with borrowed money. The unstable nature of Intraday trading doesn’t guarantee profits for a trader. One can win money as well as lose money with equal ease.

Therefore, it is advised to day trade with the money that a trader can willingly part with. Taking too much leverage only adds to the risk of day trading.

7. Diversify Your Portfolio

This is one of the most obvious Intraday Trading Rules but not many people will tell you about it. This is seen as one of the trading fundas for long term investing only, however, this is pretty much applicable in the shorter format as well.

Instead of investing big in a couple of well-performing stocks, intraday traders should look to diversify their trading options. The best bet would be to invest in portions in a number of stocks. 

Many factors such as political, diplomatic, economic announcements have a direct impact on the stock market. The stock market can therefore rise and crash at any time of the day. 

The trader instead of investing in stocks of the same sector or business should look to invest across multiple sectors and businesses. 

8. Don’t Overtrade 

Having a diversified portfolio is one thing while taking positions on stocks. But trading in stocks more than what you can afford is overtrading that might result in major losses.

The stock market is volatile and stock prices do tend to move, but not all the time. The prices don’t move all the time and traders should only enter the market when the prices are beginning to take over the market. Invest when the stock prices are notable enough.

9. Take Calculated Risks

While we know Day trading requires a participant to “take calculated risks”. While this is a common phrase in trading circles, however not everybody seems to be sure about the right definition of the term. 

Risks can be calculated by an individual by taking into account parameters such as age, trading experience, knowledge about the stock, understanding of the stock market, etc. 

In truth, understanding the parameters will enable you to make a more refined trading decision. Just ensure that the profit is worth the risk.

10. Trade with a Plan 

Enter the stock market with a plan and try to stick to it. Invest in stocks you are sure about to a certain degree, otherwise, just back off. The stock market is full of rumors, and fake news. All these can possibly impact a trader’s decision. 

An intraday trader shouldn’t listen to any inauthentic, and inaccurate information sources. Take responsibility and learn the truth on your own. Follow the stock market trends closely.

11. Measure Your Profits 

While intraday traders enter the stock market with the motive of making profits and they can be making money to a certain extent. The stock market isn’t exactly a place to sit back, Intraday traders should look for ways to maximize their profits.

Analyzing your profits will help you in devising your intraday trading strategy. Measure the amount you earn per every trade to develop a better understanding of the areas you need to improve. 

12. Go With The Trend 

While there are instances when all the predictions about the stock market fail, and the stock prices suddenly change the direction. However, those instances aren’t regular and far less in number. 

While it is alright to look for breakouts and reversals but it is not possible to trade while predicting that possibility. A trader should look for trends and make the most out of their trades by following the stock trends.

In intraday trading usually, when a stock starts moving in a direction, it follows the same path throughout the day. The short span of a single day usually isn’t enough time for stocks to recover.


Conclusion

Intraday trading offers a great opportunity to make profits. With all the benefits the day trading has to offer, one thing that remains constant is the fact that Intraday is the most fast-paced and risky trading segment.

No doubt intraday is a rewarding proposition. However, in order to reap the benefits, a trader needs to be well aware of some of the top intraday trading rules and that is exactly what we have tried to explain here. 

Adopting the rules mentioned in this piece definitely will stand a trader in good stead.

Furthermore, you must ideally be going through some of the top stock market courses available on our app – Stock Pathshala where we provide curated courses from the Industry experts in different media formats.

Install the app now to learn more.

 

Intraday Trading Tips

Intraday Trading tips are of utmost importance to traders, especially – ones who are just beginning to trade. With all the knowledge that a trader can attain through books, blogs, stock market courses, or any source it is, traders are sure to have a tough time when Intraday trading for the first time.

Many traders are looking for a quick way to make money turn to Intraday trading. However, this is a space where one needs to deal with caution. As intraday trading has the tendency to wipe off a trader’s money with just as ease. 

Intraday Trading Tips in India

Unlike investors who have long term plans to stay in the stock market, Intraday traders tend to capitalize on the stock price movements for a day.

Therefore, traders look for intraday tips to have a better chance at winning and minimizing the losses. Here in this article, we share free tips for intraday trading for beginners and experienced traders.

Liquid Stocks Is The Way

Since the process of Intraday trading involves the purchase and sale of stock in a single day, traders should select stocks that have better liquidity.

The traders can carry out their trading activities, i.e. buying and selling in the stock market before all open positions are squared off for the day. Another Intraday Trading tip for the traders would be to select a couple of highly liquid large-cap stocks. Higher liquidity indicates ease in selling the stock.

Low-cap and mid-cap stocks are less liquid and should be avoided. A trader looking to make a profit might have difficulties selling the stock that has a low liquidity ratio. On some occasions, stocks that are relatively less liquid may not even get squared off.

So, to avoid such a scenario, traders are advised to purchase multiple stocks rather than purchasing a single stock as this helps to keep the risk at the minimum.

Entry and Exit Strategy

Having a solid entry and exit strategy is of utmost importance to an intraday trader’s cause. Thus, setting the Entry and Exit prices are among the primary things that make an Intraday trading strategy work.

It isn’t uncommon among traders to feel unsure about their decisions and tend to sell the stock at the earliest occasion. Believing something is better than nothing, traders then settle for smaller profits.

We advise that you only purchase stock after studying the trends thoroughly. Later, when you do purchase a stock, you should stick to your plan and not make a panic sell thinking that the stock won’t perform well.

For more strategic understanding, check out this detailed review on Intraday Trading Strategies!

Set A Stop-Loss

The stock market is volatile, and Intraday trading all the more. Things don’t always go as planned. There will be instances when a trader might see his/her stock slip below the purchase price.

To limit the losses, traders should make use of a Stop-Loss. Setting a Stop-Loss means that the traders can set a limit on the losses they can take as well as protect their profits and if the stock price falls further down, the stock automatically gets sold.

Stop-loss orders simply help a trader make better trading decisions. 

Don’t Ignore The Market Trends

Try not to go against the market trend. Stock Markets don’t follow a certain path, and even the best of professionals are unable to make an accurate prediction about a stock’s trend. 

There are many unpredictable factors that have a direct impact on stock prices. These factors make some of the stocks grow in demand, prompting a rise in their prices, while some stocks will see a negative effect meaning their prices will drop.

Hence, as soon as you realize the market going in the opposite direction to your assumptions, waste no time in exiting the market. 

Be A Trader

Let’s get this clear – Intraday trading has a span of a day and hence requires the trader to act quickly otherwise he might end up losing his money. Here, once the stock starts following a certain trend, there isn’t enough time left for the stock to recover. 

Intraday is a trader’s game and hence requires the trader to act like a trader rather than an investor. 

By the way, do you know how intraday trading works? You should learn about it.

Don’t Overdo Your Stocks

Intraday Trading can be hugely rewarding, and traders would want to trade multiple stocks per day to make the maximum profit. However, it can prove to be a risky affair as having multiple stocks will become too much of a work.

The trader will have to choose the stocks, keep track of all the chosen stocks, apply stop-loss for each of the stocks. All this will combine to increase the efforts for the trader. 

We advise that you don’t overburden yourself, and settle for just 2-3 stocks for intraday trading. Remember less is more.

Choose And Research Your Target Companies Wisely

When you purchase stocks of a company, make sure that you research the company well. Usually, the stocks of blue-chip companies tend to perform better than others. 

The issue with them is they will be priced higher than stocks of low-cap and mid-cap companies. 

An intraday trader who lacks the ability, experience to find information about a particular company should then opt for blue-chip stocks. 

It would be easier for an intraday trader to find ample information about blue-chip companies thus giving more opportunities to earn the profit. 

Set Your Target

Intraday traders sometimes get so focused on profits that they forget to keep a note of one of the most important things, that is to set a target. Intraday trading is not all about maximizing your profit or minimizing the losses, a trader should ideally have an idea of the target price. 

Having a target price will help you in deciding your long and short position as well as setting up a stop-loss order.

Devote Time

There is no mantra that will help you gain mastery in intraday trading, but sheer practice. More the time you devote to it, the better you will get at intraday trading. Having a full-time job is fine but you will have to somehow make time for it.

As an intraday trader, you will need to keep track of your selected stock or set of stocks. Especially, the first hour of the stock market is extremely crucial for an intraday trader.


Conclusion

Intraday Trading is vastly considered an easy money-making path.

Intraday traders tend to take advantage of the stock market volatility. Traders make profits due to the fluctuations in stock prices which are caused due to various factors.

The intraday trading segment for all the benefits it has to show for isn’t free from its share of dangers. Thus, traders need to be well versed with certain intraday trading tips.

Intraday Tips not only will help them get the best out of their trades but also will assist them in keeping the losses at the lowest.

The tips mentioned in the article will help you to make the right decision and in picking the stocks that open the gateway to earning good profit.

And of course, you can check out some of the top books on technical analysis to upgrade your understanding of the shorter format of trading.

Intraday Trading Strategy

The whole weight of earning profits from Trades rests on the intraday strategy employed by an investor. Beginners might not be aware of what an Intraday Trading Strategy might look like, let alone its importance to the cause of making profits.


Fact – Intraday trading is the most populated of all trading segments. It is also the most popular trading segment for investors who have little to no experience of trading or knowledge about the stock market.


Intraday Traders make money on their investments by taking advantage of the volatility of the stock market. Intraday traders constantly stay on a lookout for an investment opportunity that arises due to the ever-fluctuating stock prices. 

Having an intraday trading investment is crucial for an investor to make the most of when an opportunity arrives, i.e. stock prices fluctuate. An intraday trader would be required to be capable of reading, interpreting, reviewing the stock market charts, graphs, bars, etc. 

Interpreting the charts is a part of the “Technical Analysis of Stocks” which is considered to be complex and more advanced topics of the stock market. 

So, ideally, a novice should look to learn about the basics of technical analysis before looking at any intraday trading strategy. Without the ability to make sense of the charts, a trader would hardly be able to intraday trade. 

You may also choose to read some of the most prominent books for technical analysis for your reference.

While you get to learn stock market from these books, in this particular article, we detail out the different intraday trading strategies you can use.

Intraday Trading Strategies in India

The intraday trading segment offers its participants enough opportunity to make profits. One of the chief characteristics of an intraday trader is having an eye for detecting one which is done through keeping track of the stock trends.

This pretty much sums up what all is required to excel in intraday trading – dedication, a fair amount of understanding of the stock market, and most importantly patience. Intraday trading requires investors to play the waiting game. 

Here is a quick review of how intraday trading works?

An investor might settle for any intraday trading strategy, but will no matter require a lot of patience to effectively implement it. Novices might require some extra time to develop the skill though.  

Another point that needs to be clarified here is that no intraday strategy is foolproof as its performance is dependent on the stock market conditions for the day. A strategy might suit investors on a given day but might completely fail him on others.

Here are some of the most often employed Intraday Trading Strategies:

Reversal Intraday Trading

Reversal Trading is also known as “Mean Reversion Trading”, and “Pullback Trading”. This strategy involves betting on stock against their price trends, hoping them to make a “Reversal”. 

When a stock makes a “Reversal”, it means the direction of a certain stock’s price trends has changed. A stock that was once surging upwards suddenly begins to dip or a stock’s prices suddenly begin to rise. 

Intraday Trading Strategy

Through this strategy, a trader can enter the market at a support level. Every trader would without a doubt love to find a position near the support level. Staying closer to the support level ultimately will help in making higher profits.

A “Support Level” is a low point in a stock’s price trends. The stock doesn’t drop below this point which prompts buyers to get in the mood to purchase the stock. 

Traders should look at stocks at extreme ends of the market, i.e. stocks peaking at new highs and new lows. As soon as the trader recognizes the stock’s reversal, he/she takes a long position to make profits on the stock’s rise. 

In case, if the stock sees a decline the trader will have to close his short position so as to prevent from taking losses. 

Also Read: Intraday Trading Tips

Momentum Trading Strategy

The Momentum Trading strategy is when an investor purchases a stock after detecting its rise and sells the same when it appears to have attained its peak. Momentum trading, therefore, involves an investor keeping track of an up-trending stock’s movement.

There are stocks on the market that make big price movements (around 20% – 30%) every day.

Momentum Trading Strategy

Momentum Trading requires a trader to act quickly in making the investment as soon he/she identifies a big moving stock, holds a position on the stock, and makes the right exit.

Investors take help from intraday technical indicators, usually volume indicators in identifying an upward moving stock for implementing the momentum trading strategy.

With just the right move, an investor can make huge profits in under a blink of an eye.

Scalping Trading Strategy

The Scalping strategy is hugely popular among currency traders. The whole idea of Scalping Trading Strategy is to make multiple profits throughout the day. 

The traders who implement this strategy, known as scalpers, look to take advantage of price movements – no matter how small and make small profits that add up to make an overall bigger profit towards the end of the day. 

Scalpers instead of focusing on winning big on a few stocks, look to win small on multiple stocks.

Scalping Trading StrategyThis strategy is relatively hard to master as it requires an investor to keep tabs on a number of stocks and study their trend.

The process of Scalping strategy forex requires scalpers to pick multiple stocks, hold positions for a short period of time, and have an exit strategy to make profits. The scalper trades multiple times a day and requires the ability to find a winning stock on a regular basis.

This strategy will work fine with traders who don’t want to get exposed to the big risks of intraday trading for longer periods.

Breakout Trading Strategy

A Breakout Trading Strategy involves a trader entering the market after the stock prices have exceeded past the limits on either extreme ends, which is the support level and resistance level. 

Anytime the stock prices move past the support and resistance levels, it indicates market volatility.

Usually, the price trend follows the direction of the breakout. Prices come down if breakouts occur near the support level and rise in the case the breakouts show up near the resistance level. 

Breakout Trading StrategyInvestors detect these breakouts with the help of technical indicators. However, the Volume Weighted Moving Average is by far the most commonly used Breakout Trading indicator.

The ideal Intraday Breakout Trading Strategy for an investor would be to take a long or bullish position on stocks closing above the resistance level.

Similarly, if the stock prices are about to close below support levels, then the investor should take a bearish position.

Pullback Trading Strategy

The term Pullback refers to the phenomenon of the prices of a financial instrument moving in the opposite direction for a brief period.

Usually, these pullbacks cause a lot of confusion for many investors who have a tough time identifying a Pullback from a breakout.

Pullbacks are also known as Retracement or Price Corrections. Having an Intraday pullback strategy benefits the investor as it allows them a better reward to risk ratio. 

Pullback Trading StrategyInvestors include the Fibonacci Indicator in their pullback trading strategy to ascertain a stock’s position whether it is near the support level or resistance level. 

An ideal Pullback trading strategy rests on the assumption that the stocks on an upward trajectory that changed their direction towards the support level will eventually rise. This opens up an investment opportunity for traders who want to sell their stocks.

On the other hand, a well-performing stock will eventually have a pullback and thus it is a favorable time to buy the stocks.

Gap and Go Trading Strategy

Gaps are empty spaces that show up on a stock market chart due to a lack of trading activity. Gaps occur between two consecutive price bars. These gaps are a regularly occurring phenomenon and are caused by some major occurring or announcements. 

An intraday trader should look for gaps of more than 4% as these allow better trading opportunities as shorter gaps are likely to be filled quickly. Usually, these gaps show up during the first hour of the trade. 

Gap and Go Trading StrategyThe first step of the process for Intraday traders who opt for this strategy is to look for these gaps.

The traders also known as Gappers take up positions after closely observing the trend. If the stock price begins to rise, the investor should take up a long position. 

In case, the market gaps down, an investor’s best bet would be to take a short position. 


Conclusion

Intraday trading is no doubt a rewarding prospect. However, with all the benefits and perks comes its own share of risks. Many enter the intraday trading segment mistaking it to be less risky than other stock market trading options.

Intraday trading is also hugely populous, to begin with, and such extreme is the volatile nature of the stock market that a single wrong move can completely wipe an investor’s money. 

Traders need to make their way around this volatile nature of Intraday trading. Intraday traders tend to do so by resorting to using the various intraday trading strategies at their disposal.

The investor will need to learn these strategies and the right conditions, circumstances to implement them. Another thing that needs to be brought to the notice is that the strategies might work efficiently on a given day, yet may not bring the desired result on others.

Investors who would like to learn more about the various intraday trading strategies can enroll for Intraday courses on the stock market learning app, Stock Pathshala. You can find all kinds of stock market courses in this app.

The e-learning platform houses intraday trading courses which will help novice investors and traders in their endeavors. 

Well, with all being said investors need to be patient as the ability to efficiently execute the strategies only comes with time and experience. 

Books For Technical Analysis

Technical Analysis, the more we talk about the topic often seems less. Investors are aware of the significance this tool holds and as a matter of fact employ it before they make any trading related decisions, be it long term or short term investments. 

Technical Analysis is a tool often employed by investors, traders to gain a deeper understanding of their investments and also help search for investment opportunities. Technical Analysis can be conducted to study, review, and predict the price movement, valuation of a stock.

The best part is an investor can carry out technical analysis on a number of financial instruments such as stocks, currency, commodities, derivatives to predict their performance after reviewing their trends from the past. 

Yes, there are some of top-notch stock market courses out there, but it does not hurt to go through a few technical analysis books as well.

In this article, we list out 10 best technical analysis books that will surely prove fruitful for investors who are intent on learning about technical analysis which they can further employ to surpass the potential of their investments. 

1. Technical Analysis from A to Z |Steven B. Achelis

Originally published in the year 1995, the financial teachings in the book stay relevant to the time. The book has been bisected into two parts. Part one is “Introduction To Technical Analysis” where the author gets to work on introducing the learner to the term and a brief detailing about its history. 

Majorly Part 1 discusses all the topics that constitute the process of Technical Analysis such as Charts, Support & Resistance, Trends, Moving Averages, Oscillators, Market Indicators, etc. 

The book provides detailed information on each topic and covers a remarkable 135 intraday technical indicators through detailed examples.

2. Technical Analysis For Dummies|Barbara Rockefeller

Barbara Rockefeller, Founder of the Rockefeller Treasury Services, in the year 2004 published this widely acclaimed book. The author does a fantastic job of simplifying such a complex topic to be brought into use by “dummies” to learn the fundamentals of Technical Analysis. 

The book has been split into 7 parts and 19 chapters precisely, aimed at discussing various topics related to the whole process. The book will help an investor learn how to observe the market behavior, find patterns, and estimate volatility in the market. 

3. Getting Started in Technical Analysis|Jack D. Schwager

This should be the go-to book for a rookie trader intent on learning about the complex concept that technical analysis is.

Jack D. Schwager, a renowned trader wrote this masterpiece in 1999 targeted towards beginners who would like to master the technical aspect of the trading game.

Getting Started in Technical Analysis looks into topics such as chart patterns, trading ranges, price trends, various pyramiding approaches. What makes this book popular among learners is the fact that the book is equipped with ample examples, illustrations that have risen out of the author’s experience itself in the trading world.

4. Japanese Candlestick Charting Techniques |Steve Nison

The name reveals it all. The book Japanese Candlestick Charting Techniques authored by Steve Nison takes on the task of discussing this ancient technique used in Japan two centuries ago. 

Upon the book’s arrival in 1991, it served the purpose of introducing the technique to the west. The vast popularity of the book brought the technique mainstream attention to the extent that it has today become the most popular of all charting techniques used for Technical Analysis. 

The book through the medium of illustrations demonstrates how the technique can be employed across the various markets, sectors.

5. How To Make Money In Stocks|William O’Neil

This gem by William O’Neil was published 32 years ago in the year 1988. The title of the book is followed by a tagline that reads “A Winning System in Good Times Or Bad” which is essentially what the book is all about. 

The book literally turns an investor into a winner by helping them develop an understanding of all types of financial charts that will eventually come in handy while making investment decisions. 

The biggest takeaway from the book, however, is the grand “CANSLIM” method which helps investors choose stocks wisely using a combination of various technical as well as fundamental analysis techniques. 

6. Technical Analysis Explained|Martin Pring

Technical Analysis by Martin Pring is an exemplary piece of work that helps a novice grow an understanding of the topics pertaining to technical analysis. The book originally published in 1980 has enjoyed 4 updates over all these years to include all the new advancements in the technique. 

The book helps an investor learn about the individual indicators, price patterns, charts that help in predicting the performance of individual stocks. 

Apart from discussing the above-mentioned topics, the book also has individual chapters on “Technical Analysis of International Stock Markets” – to help make foreign investments and “The Importance of Sentiment” – which casts light on how the sentiment of an investor dictates their trading choices.

7. Encyclopedia Of Chart Patterns|Thomas Bulkowski

The book Encyclopedia of Chart Patterns stays true to its name and is a gamut of financial chart types. The reference book extensively covers all the financial chart patterns with examples, illustrations of how they operate in real life. 

The book got published in 2000 and again got revised in the year 2005. The book in its current form today includes fresh statistics, 23 new chart patterns that ensure a learner gets access to the fresh matter and is well versed with all the advancements of recent times.

8. A Complete Guide To Volume Price Analysis|Anna Coulling

“A Complete Guide To Volume Price Analysis” is the youngest on the list, with it being published in 2013. The author, Anna Coulling did an amazing job of presenting such a complex and all the more significant topic of Volume Price Analysis.

Volume can be thought of as an indicator of market strength and can be employed by investors to their cause. These often can be employed to predict the direction of the market, it could be upwards or downwards. The author discusses both the scenarios in depth in the book. 

9. The Art And Science Of Technical Analysis|Adam Grimes

The Art And Science of Technical Analysis by Adam Grimes reveals everything that an investor might need to become a professor of Technical Analysis. The book published in 2012 is loaded with fresh stats, data, chart patterns that will prove beneficial for an investor.

The book has 2 parts with the first part dedicated to helping a learner develop a fair understanding of Technical Analysis, while the second part focuses on market structure. 

The latter includes dedicated chapters on trading patterns, trading analysis backed with all the stats that will help confirm the strategies that truly work in a certain situation. The book, a pioneer in the topic of unmasking a trader’s mindset, makes good use of accumulated data to better understand trader psychology. 

10. Technical Analysis Of Financial Markets|John Murphy

Technical Analysis of the Financial Markets” by John Murphy although was published back in 1986, received updates in 1999 to include all the new advancements of technologies, newer technical tools, and indicators to meet the needs of today’s time.

The author, boasting of over 40 years of experience as a technical analyst has written this book with special considerations for making complex topics as simple as possible. Learners who want to grow acquainted with the world of technical analysis should have this on their shelves as a must.


Conclusion

Technical Analysis is a significant tool that helps investors in choosing the stocks that meet their investment strategy. Investors need to learn factors such as price trends about the chosen stocks to make better investments.

Learning through books is the traditional method to grow familiarity with the topic, however, choosing the book that best delivers on that front could be a challenge. The books compiled in the list are the most reliable and widely accepted among the investor fraternity. 

While books like Technical Analysis for Dummies, Technical Analysis from A to Z, Getting Started in Technical Analysis are more suited for traders who are just beginning on their trading journey and still learning their way around in the trading world. 

In addition to reference books such as Encyclopedia of Chart Patterns, the list also features books for traders who already have some idea of the topic at hand. Steve Nison’s Japanese Candlesticks are strictly dedicated to the Japanese charting technique of Candlesticks. 

But, one thing is for sure the books on the list are a sure-fire solution to the dilemma of technical analysis.

By the way, we also have an amazing review on some of the top fundamental analysis books for your reference. Feel free to check out.

 

Books For Learning Stock Market

Before anyone dares to make any sort of investment in the stock market, we assume they already have enough understanding of its functioning or at least basic knowledge. If anyhow it isn’t the case, we would recommend that they gain an insight about the same through books for learning stock markets. 

The Stock Market can be tricky and at times an overwhelming place, especially for a beginner who has just landed in there without ever having a real experience of trading. 

The unforgiving and merciless nature of the stock market can leave the first time investors badly hurt.

The Stock Market isn’t exactly a place to enter without knowing the rules of the trading game. So, our first instinct would prompt us to advise them to learn about the stock market. Yes, you must be looking at some of the top stock market courses too but yea, books can complement the learning experience as well.

But, again, the internet can prove to be just as confusing a place. The search engines will, without doubt, throw up 100’s of books for learning the stock market. 

Learn more: Intraday Trading Rules

Top Books For Learning Stock Market You Must Read

We know, in that case, investors already worried by the prospect of learning to trade can have headaches finding a reliable source of information on the stock market. So we went a step further and recommended books for learning the stock market. 

Here in this article, we present to you the 10 best books for learning the stock market :

1. The Intelligent Investor ⏐ Benjamin Graham

Benjamin Graham, often known as “The Father of Value Investing” got this book published long back in 1949. The trading world we know today is a whole lot different from the one talked about in the book.

However, this book has been a source of timeless trading wisdom and the techniques mentioned in the book still work wonders for individual investors.

The most popular example is that of probably the biggest investor of the current time – Warren Buffet, who practiced the knowledge in the book to good use. 

Also Read: Intraday Trading Examples

The book has been divided into 3 parts, where the first part talks of the investment techniques adopted by a bullish investor, whereas the second part discusses market behavior.

The third chapter explains various concepts that relate to the topic of risk management.

2. Trade Your Way to Financial Freedom ⏐ Van Tharp

The author Van Tharp is a well-recognized figure in the field of trader psychology having been in the profession since 1982.

“Trade Your Way to Financial Freedom“ published in 2006 became a huge favorite at the time and still enjoys reverence among investors.

The book features interviews between the author and some of his clients he helped to greater investment glory. The book contains chapters on some of the more advanced topics of investor psychology, fundamental analysis, technical analysis, and systematic approach.

A novice will learn some of the crucial elements of trading such as managing finances, the risk to reward ratio which can help investors reduce losses.

3. Fundamental Analysis For Dummies ⏐ Matt Krantz

Published in 2016, the information, data, and the stats contained in this book are still as fresh as ever. The book is a beginner’s guide to the topic of fundamental analysis which helps investors make a prediction about a particular stock’s potential. 

The book teaches how fundamental analysis can be employed by investors to ascertain a financial instrument’s performance for long term investment. Author, Matt Krantz demonstrates how to conduct fundamental analysis on stocks, bonds, commodities, and forex. 

The book is written with special attention to using as simple a language and even the technical terms are presented in a plain manner so that it could be understood by the novices. 

4. Security Analysis ⏐ Benjamin Graham and David L. Dodd

The book “Security Analysis” by Benjamin Graham and David L. Dodd got published in 1934 soon after the wall street registered its biggest crash to this date. Investors hold the book with such high regard that many still refer to it for help even after all these years. 

The book upon its release instantly became a firm favorite among investors for the practical techniques talked in the book catered to the need of the time. 

Both the authors, considered great financial analysts, presented a whole new investment method which was considered safer, yet profitable than the techniques available at that time. 

The teachings in the book can be of great help to investors to learn to cushion themselves against a situation like that were to ever appear again.

5. How to Avoid Loss and Earn Consistently in the Stock Market: An Easy-To-Understand and Practical Guide for Every Investor ⏐ Prasenjit Paul

“How to Avoid Loss and Earn Consistently in the Stock Market” by Prasenjit Paul is the only book on this list by an Indian author. Published in 2015, the book is like its tagline says – “An easy to understand and Practical Guide” that can be employed by any investor to match their investment needs.

This book will help an investor to look for a high performing business or stock for making an investment while also teaching them to know the right time to invest to maximize the profit potential. 

The book contains a chapter where the author tries to convince the readers that Stock Markets aren’t indeed risky and can easily be worked around with the right move at the right time. The book will help readers develop that knack to some extent.

6. Encyclopedia of Chart Patterns ⏐ Thomas Bulkowski

This book by widely acclaimed author, Thomas Bulkowski is a reference book containing all the types of chart patterns used for conducting fundamental analysis on stocks, businesses.

Chart patterns are one of the most important tools required by an investor to carry out a fundamental analysis.

“Encyclopedia of Chart Patterns” originally published in the year 2000, got revised again in 2005 to include all the new chart patterns for both bull and bear markets. The revised version includes 23 new chart patterns.

The book has been split into 2 parts consisting of a part dedicated to Chart patterns and Event Patterns. 

7. How to Day Trade for a Living: Tools, Tactics, Money Management, Discipline and Trading Psychology ⏐ Andrew Aziz

This book is an autobiographical account of the author, Andrew Aziz which will provide the reader with ample knowledge, practical information from the real-life experience of participating in day trading, or otherwise known as intraday trading. 

Also Read: Intraday Trading Strategy

The author shares his own experience of the time he started as a day trader and with a stroke of luck made a profit on investment unrealistically high for a first time trader. Further, revealing how easily he lost all of his hard-earned money in a blink of an eye.

Such incidences only go on to make the learner aware of the high stakes game and all the risks involved in the day trading. 

8. Getting Started in Technical Analysis ⏐ Jack D. Schwager

An investor having absolutely no idea of the term technical analysis should look to get their hands on this book. This book by the vastly recognized financial expert and one of the best selling authors, Jack D. Schwager gives all the answers a rookie needs.

Written in easy to understand language, the book simplifies a vastly complex and critical topic of technical analysis for investors with limited experience in the trading world. The book serves the purpose of introducing readers to the various technical analysis tools.

These tools such as trading ranges, chart patterns, pyramiding approaches, price trends, various ratios to develop an accurate understanding of the stocks an investor intends to invest in. 

9. A Random Walk Down Wall Street ⏐ Burton Malkiel

This book right here is a classic. “A Random Walk Down Wall Street” written back in 1973 has been a hugely successful book in terms of registered sales. The book as of 2020 has been sold over 1.5 million times.

Authored by American economist, Burton Malkiel puts forward his contention that most of the time stock prices follow a pattern similar to a random walk, hence it is as close to impossible to make predictions about their movement. They can rise and fall at any time without showing any significant signs.

The book, having received 12 revisions, still has the charm of a classic and the fresh content matter to meet the needs of time is equipped with techniques such as fundamental analysis, as well as technical analysis.

10. How to Make Money in Stocks ⏐ William O’Neil

“How to Make Money in Stocks: A Winning System in Good Times and Bad” is written by William O’Neil, renowned entrepreneur and founder of the stock brokerage company by the name William O’Neil & Co. Inc. 

The book is a great addition to an investor’s bookshelf as this guide is full of advice about trading in the stock market. The author discusses the best practices, techniques by illustrating examples from his own experience in the trading world.

Readers will learn about the “CANSLIM” method which has been devised by the author himself.

The method is a blend of technical and fundamental analysis and helps an investor develop an understanding of how and when to cut losses on investments.


Conclusion 

Quite the truth, the Stock Market is a lucrative proposition. Even when they are well aware of the risks in the stock market, the threats posed by the scammers, and many falling to such fraudsters that come to light in the newspapers on a regular basis.

Many seem to live under the impression that trading is a cakewalk.

However, the fact is that trading on the stock market requires a fair amount of understanding of the operations of the stock market and the various processes involved in trading. 

However, people who want to learn to trade on the stock market can have a tough time finding the right book to help them with the task.

The list of books dedicated to the subject of the stock market keeps on getting longer by the day. 

This prompted the need for a list of best stock market books.

This list features books for beginners as well as books that will help investors develop know-how of advanced topics such as financial techniques of fundamental analysis, technical analysis. 

The Stock Market is a subject and the books mentioned on the list surely will help an investor gain a good level of insight about the same, and graduate with good marks. The knowledge will help an investor in their trading journey.

Fundamental Analysis Books

Stock selection is among the initial and most important parts of trading. To a newcomer, it can appear to be an easy affair, however, experienced investors know the importance of investing in the right securities. Fundamental Analysis books hence hold great significance in the trading process. 

In general, Fundamental Analysis is performed by analysts on stocks to develop a more accurate estimation of any stock’s value for long term investments – investments that exceed 3 years. 

Fundamental Analysts take in a lot of factors such as interest rates, the performance of the market, performance of a business to draw a proper estimation of a stock’s value. 

Other than paying unnecessary attention to daily and insignificant fluctuations in a stock’s price, fundamental analysis helps investors to study and invest in stocks for the long run.

This uncertain nature of trading causes the investor to rethink about making long term investments, however, that fact remains out in the open that long term investments perform far better than short term investments. 

So, an investor that finds himself in such a situation will ideally look to educate himself about how to perform Fundamental Analysis on stocks. Many who would like to adopt a more traditional method of learning would prefer to learn stock market through fundamental analysis books. 

Yes, there are so many stock market courses available too that you should ideally be checking out, especially the ones we offer at Stock Pathshala. But, avid book readers would want to have their hands dirty on a few books for learning stock market too.

Here in this article, we present 10 of the best fundamental analysis books that will help an investor make better long term investment decisions.

1. The Theory of Investment Value ⏐ John Burr Williams

Call this a modern classic that tackles one of the most important aspects of investing – Fundamental Analysis.

The book originally was written as a Ph.D. dissertation by the author John Burr Williams while still a Harvard student. But, got published in the year 1938. 

Many prominent names from the world of finance have used the information from the book to make better investments.

The book has been split into 2 parts, with the first part titled “Investment Value and Market Price” which looks into topics such as speculation in the stock market, evaluating the present worth of stocks, etc.  

While the second part is made up of case studies of investment value which is a collection of case studies from the past. 


2. Security Analysis ⏐ Benjamin Graham and David L. Dodd

Another classic on the list, the book Security Analysis has been co-authored by Benjamin Graham and David L. Dodd. 

The book was published in the year 1934 during the time when the world was enduring the great depression resulting from the first World War. 

Written at the time when the world literally was at its feet and the stock market recorded its worst crash, the book is a great source of everlasting information, advice on fundamental analysis of stocks and investment techniques that stand the test of times.

The book in its sixth edition features commentary from the eminent figures of The Wall Street, including former managers, financiers, investors debating why the teachings in the book remain significant despite all these years. 


3. The Intelligent Investor ⏐ Benjamin Graham

The list without the mention of this gem of a book by “The father of value investing” – Benjamin Graham would have been considered incomplete.

The Intelligent Investor was originally published in the year 1949 and has stayed hugely popular with investors ever since.

This book has been a source of inspiration for many successful individual investors such as  Irving Kahn, William J. Ruane.

The Intelligent Investor includes a chapter discussing the history of stock prices recorded as early as 1972 and the portfolio approaches adopted by investors of differing mindsets in accordance with their investment needs.

The book provides advice to the investors in scenarios both positive and negative. 


4. Mastering Fundamental Analysis ⏐ Michael C. Thomsett

Mastering Fundamental Analysis is for traders who are already familiar with the concept of Fundamental Analysis to some extent.

The book written by Michael C. Thomsett was published in 1998. 

The book will help an investor learn Fundamental Analysis starting off by discussing the basics of the process before advancing to more complex topics such as various types of Ratios, Trends.

The book is aimed at investors to help forecast stock prices in the future.  

The book is loaded with examples that help better understand the charts, graphs, checklists that form an integral part of fundamental analysis. 


5. Getting Started In Fundamental Analysis ⏐ Michael C. Thomsett

“Getting Started In Fundamental Analysis” is the perfect way for a beginner to gain awareness about the topic of Fundamental Analysis.

Published in 2006, the book is a wholesome guide for investors written in a non-technical writing style that will offer investors insights to lessen the risks of an investment.  

Author Michael C. Thomsett is a stock market expert having immense knowledge on the topic relating to trading.

This fact needs to be known that he has penned over 12 financial books. 

The book although looks like an introductory book but offers invaluable knowledge on how an investor can detect and manage the risk level of any investment. 


6. Fundamental Analysis For Dummies ⏐ Matt Krantz

The title of the book reveals the target audience it is aimed at.

A beginner can make use of this book which is written in the simplest of languages possible to learn how to accurately determine a stock’s true worth. 

Fundamental Analysis For Dummies written by Matt Krantz is full of illustrations and practical knowledge that will assist a beginner to learn about the various tools that are used in the process.

A book teaches how to draw a comparison between a company and its rivals.

In addition to learning to carry out analysis on stocks and businesses, this book, explains how to conduct the same on other financial instruments such as currency, commodities, and bonds. 


7. Business Analysis And Valuation: Using Financial Statements ⏐ Krishna G. Palepu and Paul M. Healy 

Authors Krishna G. Palepu and Paul M. Healy, both Harvard business school graduates wrote this book that provides an in-depth understanding of a company’s business strategy and ultimately its performance.

The book published in 1996 got revised for the fifth time in 2012.

The book has three parts, where the second part is entirely dedicated to the topic of Business Analysis and Valuation Tools that form a part of the process of fundamental analysis. 

Further, the third part of the book “Business Analysis and Valuation Applications” teaches an investor about the fundamental analysis conducted on any business and its example.


8. Ratio Analysis Fundamentals ⏐ Axel Tracy

Through this book, the author Axel Tracy teaches investors to carry out a complete analysis of a company using just 17 Financial Ratios.

Ratio Analysis Fundamentals can prove to be a great place to start for investors with no prior understanding of ratio analysis. 

Ratio analysis is an important tool that helps to learn about a business’s profitability and operational efficiency through its financial statements.

This again holds the utmost importance to the cause of an investor for making investment decisions. 

The author teaches how to employ ratio analysis for measuring a company’s liquidity, efficiency, as well as valuation comparison of stocks. 


9. Futures: Fundamental Analysis ⏐ Jack D. Schwager and Steven C. Turner

Written by one of the most credible financial experts of current times – Jack D. Schwager,  the book has Steven C. Turner as a co-author and is a complete guide on fundamental analysis in futures trading. 

Through the book, the investor will get to learn about the techniques to determine the value of stocks for futures trading.

The author pours his years of experience and expertise on the topic of fundamental analysis in the book.

The book is full of real-life experiences of the author that can prove invaluable to investors in futures trading.

The author seems to simplify all the complex information through the means of examples, tables, illustrations, and charts.


10. Fundamental Analysis and Position Trading: Evolution of a Trader ⏐ Thomas Bulkowski

This book by Thomas Bulkowski published in 2012 is the youngest on the list.

The author talks about the existing 4 major trading patterns people tend to develop and adapt over time while trading in the stock market.

The book shows that traders tend to follow a peculiar trend that is purchasing a certain stock that is trending due to one factor or the other and hold a position on the stock for some time before ultimately choosing to sell that stock as soon as the trend expires. 

The part “Fundamental Analysis and Position Trading” takes on the topic of the best practices to conduct fundamental analysis on stocks that have the potential to multiply their value by as high as 10 times.


Conclusion

Stock selection is a question every investor faces, but more or less have a hard time deciding for ones that promise profits on investment over a period of time. Fundamental Analysis is the solution to this problem.

It is used by analysts on stocks to gain a clear estimation of a stock’s performance over a period of time. Since, Fundamental Analysis is a more technical aspect of trading and will require an investor to have a reasonable amount of understanding of tools such as charts, graphs, price trends, etc. 

Investors turn to books to gain this knowledge, however, again face a hard time finding accurate information. Thus, this list of the best fundamental analysis books becomes all the more important.

This list contains books for beginners such as “Fundamental Analysis For Dummies”, whereas 

“The Intelligent Investor” by prominent investor Benjamin Graham can prove beneficial for an investor and enhance their ability as an investor. 

Author Axel Tracy’s book, “Ratio Analysis Fundamentals” is unique in terms of the matter but finds a place on the list purely by the virtue of its pure brilliance.

The books on the list deliver on the agenda of educating investors about the importance and the techniques of Fundamental Analysis.

Learn Stock Market

It isn’t uncommon to hear people whine about feeling the heat due to financial crunch. Anyone can experience it many at some point in time, find themselves in the situation. Such conditions leave people looking for alternatives to income. One of the most ignored options is to actually go ahead and learn Stock Market. 

The biggest reason for it is the existing myth among the general public that trading in the stock market requires a hell lot of money, and trading is a game only the wealthy lot get to play. This again comes down to the lack of awareness and mostly poor financial education among the majority of the populace. 

However, even when some intend to learn about the share market before trying their luck at trading, they are met by the prevalent misinformation about the stock market. 

The menace of false information on the internet in astounding proportions further adds to the worries of a rookie trader who is already bothered by the overwhelming prospect of the stock market. 

The uninformed trader can enroll in these stock market courses readily available on the internet, without realizing the course matter is full of incorrect information and outdated. 

Then there are courses offering reliable matter but charging exorbitant amounts of money. Thus, many wishful learners who want to learn stock market trading are scared by the prospect of making such an investment.

Consider yourself in safe hands, though. For we, today, decided to take up the matter in our own hands and share a couple of sure-shot methods anyone can use to learn share market. Follow this article to learn more.

Learning of Stock Market in India

The Stock Market is synonymous with opportunities. The Stock Market offers ample opportunities to everyone who lands in the domain. The success stories are for everyone to see and are a source of inspiration for many. 

Learning the stock market, however, isn’t all that easy. There’s a reason behind you landing on this article. There are certain ways of doing so, we take a look at the most effective ways a learner can use to gain knowledge of thereafter conquer the stock market.

Learn Stock Market App

Since their arrival, smartphones have taken over the place once occupied by computers and laptops. This shouldn’t come around like something out of the blue that people around the globe approximately spend around 4 and a half hours on their smartphone, which is a whole lot of time.

The accessibility and portability being the reason for the above trend. So, this pretty much dictates that the learners would happily welcome a stock market app on their phones as well as their life. 

There are many apps to learn stock market that caters to the need to educate people about the stock market; however, Stock Pathshala stands out among its contemporaries.

The one of its kind stock market e-learning platform educates the audience through offering courses for stock trading

The platform is unrivaled in ensuring a user-friendly interface to its users hence scoring big on user experience. Also, the users have all the options in the world at their disposal as Stock Pathshala offers textual courses, video courses, and audio podcasts, which ensures learning on the go is possible.

Staying true to the belief, language should never be a hindrance to learning.

The platform houses courses in English as well as in the Hindi language. Additionally, there are plans to introduce stock market courses in Marathi, Telugu, Tamil languages to further widen the reach of the platform. 

Users can access the platform and enroll in the free introductory textual courses to kickstart the stock market learning. However, if the user would like to gain access to video and audio courses or gain a deeper understanding of the stock market by enrolling in the available advanced courses, then the user will have to become a Pro member of the platform.

Currently, Stock Pathshala offers three pro plans, by subscribing to which users gain access to the platform and its content. The 3 plans on offer – Beginner, Star, and Legend vary in duration of the validity period.

Learn Stock Market Books

Consider this the classic or the pre-smartphone era solution to the need for gaining knowledge about share markets. However, this method still stays relevant to the day. Books pave the way to enlightenment; similarly, financial books help a learner enhance their financial knowledge. 

Globally acclaimed books such as “Stock Investing For Dummies by Paul Mladjenovic”, and the hugely popular “How to Make Money in Stocks by William O’Neil” which has registered over 2 million sales, definitely score big on the promise of educating people the practical knowledge of making stock market investments.

The language used in these books is simple and is expressly written with the motive of simplifying the technical jargon of the stock market for the readers. 

Learn Stock Market Online

Another sure shot method that finds itself a place in this article is to learn the stock market online through the help of articles, blogs dedicated to the stock market space, and the topics about it. 

One prominent stock market blog that instantly comes to mind is adigitalblogger. Such remarkably consistent has been their body of work, that they’re the go-to blog for people encountering queries regarding the stock market. 

The blog is a leader in offering information about the stock market space and currently sees 6 lakh visitors on a monthly basis. The blog is a reliable source of information and provides fresh and updated articles dedicated to stock market topics every week.

One can easily find articles on almost every topic that in one way or the other is related to the stock market.

Yet another way is to learn share market through Youtube. This method too falls in this category itself. 

Youtube is undoubtedly a great source of entertainment, but can also be a great source of education, financial education in our case.

The video streaming platform is full of channels that have taken on the huge task of imparting concepts, mechanisms, operations of the stock market to people. With youtube there literally is no dearth of options, when it comes to channels that serve the purpose.

However, such a scenario gives rise to a hotchpotch situation. Therefore, people should turn to credible sources of information. Again, the first that comes to mind is the immensely popular blog, the one we discussed above – adigitalblogger. 

Their Youtube channel by the same name boasts of a subscriber base of over 1,20,000. 


Conclusion

Of all the options that can help generate a regular source of income, the Stock Market is the most ignored one. The stock market often escapes the discussion among regular folks owing to the poor education regarding the topic.

Yet, everyone is aware of its huge potential. Traders who played it right have gained unprecedented success. However, the stock market is no less than a double-edged sword. 

The ease with which you earn profits also works in the opposite direction and can leave a trader losing money more than they can afford to.  

This calls for dealing with caution and learning about the stock market before venturing any deeper. Among the various methods to learn the stock market, we discussed the most prominent and most effective methods of achieving the same.

Among the traditional methods to develop know-how of the stock market is reading books and learning on the internet through blogs, and articles. 

However, learning the stock market through an app is gaining impetus, and e-learning platforms such as Stock Pathshala are among the front runners in the department. 


Learning Stock Market FAQs

Here are some of the top frequently asked questions about the stock market learning space in India:

Can you learn trading by yourself?

Yes. if you make efforts in the right direction. Learning the stock market is possible through the means discussed in the article above. You can learn through stock market e-learning applications, stock market books, or reading articles on reliable blogs.

How long does it take to learn the stock market?

This depends on the medium you choose to learn through. However, if you choose to learn through courses on the stock market learning app, Stock Pathshala, you can gain basic knowledge about the stock market within a month or two. 

However, if you wish to become a pro at trading, the learning process can take years.  

Is trading hard to learn?

A mix of both. Learning anything takes time, patience, and dedication. Trading is no different. With the proper guidance and following a clear path can take you a long way in your endeavors.

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