Intraday trading as the name suggests involves trading of stocks within the same day. The process involves squaring off your trade with an intention to earn high profits by optimizing the fluctuation of stalk indices. Squaring off your trade simply means to ‘buy and sell’ or ‘sell and buy’ your trade on the same day before the market closes. As such, this type of trading is also popularly known as ‘Day Trading’.
Intraday trading involves optimizing the market’s volatility to make profits. Mostly, professional traders engage in it. However, by following certain intraday trading strategies even beginners can begin to pocket profits.
Important Intraday Trading Strategies
The risks involved in intraday trading is comparatively higher than investing in the regular stock market. Therefore, beginners are advised to invest with a minimal-risk approach. While the profits can be higher, so can the attached risks. So, if you are planning to step onto this vessel called intraday trading, here are a few tips that may help your boat stay afloat:
- Always read and analyse the market before making you trade
- Learn extensively about current market trends
- Stay away from volatile stocks
- Cut losses by staying within the budget
- Trade only in liquid stocks
- Stay focused and disciplined
- Trade on a maximum of two stocks
- Know when to exit
- Be patient
Intraday Trading and Investment Techniques
Once you have invested some time in learning all about intraday trading strategies, focus your attention towards intraday trading techniques and how to implement them well. After all, this is the only way you can look to make some handsome profits. Listed below are few techniques that will help you understand the principles and the process:
- Make an investment when the market reaches a high point, but is expected to fall.
- Place your money on stocks with a strong base instead of risking it on undervalued ones.
- Try to invest a maximum of 2-5% of your money on a single open position.
- Make use of stop-loss. This will help you mark your exit strategy and prevent huge losses.
- Book profits when prices reach the target. However, if you choose to continue holding your position, consider using trailing stops that will seal your expected profits.
- Avoid chasing volatile stocks in a bid to get quick returns. Instead, invest in stocks that have trended significantly higher for a prolonged period of time, and exit with gains before the bubble bursts.
- You can also consult an intraday trading techniques expert who can assist you in making the right decisions.
Before stepping into this business, you must understand that this type of trading involves a lot of risks. Therefore, every trader must trade in his comfort zone, and invest only as much as they can afford.
In conclusion, to succeed in intraday trading, one must understand that it shouldn’t be considered a part-time or alternate source of income, but rather a full-time investment of time and resources. So, if you are a beginner, stay within the rules and rely on your strongest instincts. You may just come out a winner!
