Beginners are often baffled about choosing the right kind of tools and trading accounts for trading. Angel Broking provide Angel Eye – a competitive trading account that offers the right kind of research tools and material to help you with your first trade.
To begin with, Traders use real-time charts to identify the intraday price movement. Along with price monitoring, there are several other tools that help in making your initial trades successful.
Here is a guide of moves and strategies that will help you profit while doing intraday trading:
Enter and Exit intraday trading at an Ideal Time
A great tip for intraday trading is to trade with the prevalent intraday trend. It allows low-risk entries and potential for greater profit if the trend continues. Such trends provide useful entry and stop-loss strategies. An intraday trading strategy must have entry and exit signals, i.e. when to get into a particular position and when to withdraw. Once the system generates an entry signal and the position is taken, the exit position has to be decided. You can exit if either of the two conditions is met—you have achieved your desired profit or maximum loss is reached. Once the desired profit is achieved, it is advisable to exit the trade. You must set profit and stop-loss targets before the trade and must not let impulsive behaviour get the better of you.
Choose stocks after historical research
The main aim of intraday trading should be to create the best stock picking strategy which preserves capital and, at the same time, controls risk. Start by trading a single stock and learn the characteristics, trends and risks associated with the stock. Once you’ve understood the behaviour of stocks, you will have a better understanding of the best-performing stocks.Choose highly liquid stocks, i.e. stocks with a high average daily volume. These stocks can be bought and sold in sufficient volumes without causing much impact on prices. Also, trade in stocks that have good correlation with major indices and sectors. Avoid unpredictable stocks, which tend to trade in a volatile manner.
Have a pre-defined target
New traders may feel discouraged with their ability to reap profits and may fail to do important things necessary to succeed in day trading. It is important to have a day trading plan to avail of the numerous opportunities in the Stock Market. Beginners need to use trading strategies to take advantage of these opportunities. Set profit and stop-loss price targets before you trade so as to limit your potential loss and to prevent yourself from being too greedy. Also, conduct trade in a disciplined manner. Don’t let impulsive behaviour get the better of you. Instead, stick to your day trading plan and don’t expect to get rich in a single trade.
Pick the intraday market direction
You can pick an intraday market direction using the ‘value area’. The value area is the range where almost 70% of the previous day’s trade took place. If the market opens below or above this value area, and remains in this area for two consecutive half-hour periods, then the market has an 80% chance of filling the value area. This parameter helps in gauging the market direction. Once you get used to the concept of value area and the 80% rule, trading can be profitable.If the market opens higher than the value area, enter a short position closer to the top of the value area. Similarly, if the market opens at a value lower than the value area, enter in a long-term position towards the bottom of the value area.
Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing financial difficulties.
A few intraday trading tips discussed below should help investors in making the right decision.
Tips for Intraday Trading
- Below are a few tips for intraday trading in Indian share market which will help investors in making the right decision:
- Choose Two or Three Liquid Shares
- Determine Entry and Target Prices
- Utilizing Stop Loss for Lower Impact
- Book Your Profits when Target is reached
- Avoid being an Investor
- Research your Wish list thoroughly
- Don’t Move against the Market
- Basic Rules for Intraday Trading
- Intraday Trading indicators
- How to make profit in intraday trading
- Intraday Time Analysis
- How to Choose Stocks for Intraday Trading
Choose Two or Three Liquid Shares
Intraday trading involves squaring open positions before the end of the trading session. This is why it is recommended to choose two or three large-cap shares that are highly liquid. Investing in mid-size or small-caps can result in the investor having to hold these shares because of low trading volumes.
Determine Entry and Target Prices
Before placing the buy order, you must determine your entry level and target price. It is common for a person’s psychology to change after purchasing the shares. As a result, you may sell even if the price sees a nominal increase. Due to this, you may lose the opportunity to take advantage of higher gains because of the price increase.Utilizing Stop Loss for Lower Impact
Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit. This is beneficial in limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations. This intraday trading strategy ensures emotions are eliminated from your decision.Book Your Profits when Target is reached
Most day traders suffer from fear or greed. It is important for investors to not only cut their losses, but also to book their profits once the target price is reached. In case the individual thinks the stock has a further possibility of rising in price, the stop loss trigger must be readjusted to match this expectation.
Avoid being an Investor
Intraday trading, as well as investing, requires individuals to purchase shares. However, factors for both these strategies are distinct. One kind adopts fundamentals while the other considers the technical details. It is common for day traders to take delivery of shares in case the target price is not met. He or she then waits for the price to recover to earn back his or her money. This is not recommended because the stock may not be worthy of investing, as it was purchased only for a shorter duration.Research your Wish list thoroughly
Investors are advised to include eight to 10 shares in their wish lists and research these in depth. Knowing about corporate events, such as mergers, bonus dates, stock splits, dividend payments, etc., along with their technical levels is important. Using the Internet for finding resistance and support levels will also be beneficial.
Don’t Move against the Market
Even experienced professionals with advanced tools are not able to predict market movements. There are times when all technical factors depict a bull market; however, there may still be a decline. These factors are only indicative and do not provide any guarantees. If the market moves against your expectations, it is important to exit your position to avoid huge losses.Stock returns can be huge; however earning smaller gains by adhering to these intraday trading tips & strategies should be satisfactory. Intraday trading provides higher leverage, which effectively provides decent returns in one day. Being content is crucial to succeeding as a day trader.
No comments:
Post a Comment
Thanks for visiting the blog. Your comments are welcome.