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.

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