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Thursday, February 22, 2024

How to do Intraday Trading? – Perfect Guide

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Intraday trading entails taking a shorter or longer position in securities and closing them all before the trading day’s completion. Intraday trading tools and methods are significantly distinct from those used only for long-term investment. 

A transaction in intraday trading involves two participants, one to sell and another to purchase the stocks. The marketplace is very volatile, and earnings are not only dependent on the market rising. Investors can make a profit even while the market is in a downturn. 

The purchasing and selling of stocks and other financial instruments during the same day is known as intraday trading. In other terms, intraday trading implies that all positions are squared off just before the market closes and that there is no shift in share ownership due to the transactions. Until now, many thought that day trading was just for financial companies and experienced traders. However, due to the prevalence of computerized trading and margin trading, this has evolved. 

Regardless of everything else, it is always a good source for side income, and gradually you can become an excellent trader. Considering the complexities of intraday trading, you shall join a course to understand its intricacies.

The Thought Tree offers one of the best stock market course in Jaipur. They have almost eight trading courses. With a minimal course fee, you also get many additional advantages after completing the course like guaranteed internships, globally recognized certificates, a free Demat account, etc.

This post will go over some of the disciplines that a day trader should practice before moving on to intraday trading.

Tips to do Intraday Trading

1. Maintain a Consistent Trading Strategy 

How to do Intraday Trading

Having a plan is essential for trading success. A trader must have a trading strategy since day trading is not easy. A good strategy will tell you when to enter a trade, when to record a profit, when to reduce losses, and where additional possibilities may arise. A solid trading strategy may assist a trader in avoiding emotional choices in the heat of battle. 

2. Use the Money you may afford to lose while Trading

It’s critical to put aside some money for day trading. However, a trader must consider how much loss he is prepared to accept overall and each transaction. 

3. Entering or Exiting at the Right Time

Trading with a prevailing intraday trend is a fantastic idea. This provides the opportunity for low-risk entry locations with excellent potential for profit if the pattern continues. Identifying such trends aids in the development of effective entry and stop-loss tactics. To determine when to leave, consider two parameters: when you have achieved your goal profit or once you have reached its highest loss limit that you do not want to fall below. When you have achieved the desired profit level, you may consider exiting.

4. Always have a Stop Loss

As an extension of the previous principle, always have a stop loss. A stop loss is an exit strategy that you may use if your trend or anticipation does not turn true. If here, on the other hand, your prediction comes true, you need to know how to set various target levels – T1, T2, etc. – so that you can exit at different price points.

Basis of Stock Selection

1. Liquidity 

How to do Intraday Trading

Liquid stocks often have many volumes. This enables the buying and sale of more significant amounts without substantial price effects. As intraday trading methods rely on speed and exact schedule, a large volume facilitates entry and exit. Depth is also essential since it reflects how much other liquidity a stock has above or below the current market offer and offers at different price levels.  

2. Moderate to High Volatility 

How to do Intraday Trading

Day traders need price movement to earn money. Day traders may select equities that move significantly, either in terms of dollars or percentages. These two filters typically provide different results. Stocks that typically move 3% or more each day have regular significant intraday transactions.

3. Followers of Group 

Although there are some specialists in contrary bets, many traders choose the stocks correlating with their industry and index group. This implies that the prices of the individual stock likewise increase when the index or sector rises. This is essential if the trader wants to trade the strongest or weakest inventories every day. If a trader wants to trade the same stock every day, it is obvious that he should concentrate on that particular stock; he then does not have to worry much about whether it’s connected to anything else.


1. How to Start Intraday Trading? 

It begins with establishing a trading account and Demat. If you have a trading account, then you may register for the appropriate tools for intraday trading. Tools also assist and manage your taxes since intraday businesses are handled differently according to the income tax law. After you have the necessary tools and accounts, you can start by looking at daily charts to detect price patterns.  

Read More: Tips for Writing a Finance Case Study

2. Which kind of Stocks to Choose From? 

In intraday businesses, before the market closes, you need to square your position. It is thus essential to select stocks that have sufficient liquidity to carry out such transactions. For this reason, many advocate high liquid inventories such as large-cap inventories. This may also reduce your business’ possibilities of affecting the share price of the chosen company.

3. How to participate in intraday trading? 

Anyone who could take risks and have adequate time to monitor the market carefully can do intraday trading. Trading intraday offers huge profits and may thus be extremely tempting. However, it also entails more significant risk than the delivery sector.

So, you may wish to avoid intraday trade if you’ve had a day job that needs your complete concentration for most trading hours. For one aspect, you have to keep a close eye on the market and timing your business. Furthermore, it would be best to have a thorough knowledge of and time to carry out technical analysis in daily diagrams to make the correct choices.

Intra-day is not simple. You have to guess the market direction early as an intraday trader. The easiest method of doing so is to determine the ‘value area’ for the equities you want to trade. This may assist you in deciding on trade. It is also essential to remember that this trading style does not fit all traders or investors on the stock market.


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