The term ‘share market’ instills some fears and doubts within most people. Most of us hesitate to trade in the share market. Trading refers to the act of either buying or selling shares that are done with the intention of making a profit. Intraday trading is a little different than trading in long term equity. Intraday trading is the process of buying and selling stocks on the same trading day. The main objective is to make a profit by taking advantage of the stock market movement. To be able to perform intraday trading, you need to have an active trading account. Intraday trading involves a lot of risk-taking. If you are new to the trade market, one of the most common and important Intraday trading tips is that, invest just the sum you can stand to lose without facing monetary troubles.
For the individuals that want to learn more about intraday trading, the best way to go about it is by knowing a few Intraday Trading Tips And Strategies. Mentioned below is a list of Intraday Trading Tips And Strategies that will help you make the right decision while investing in the share market.
- Choose Liquid Stocks: Choose 2 or 3 large-cap stocks that are highly liquid for intraday trading. Avoid stocks of small and mid-cap that may not be sufficiently liquid. Otherwise, your squaring off order may not get executed. It is highly advised against investing all your money in a single stock. Diversify your investments across 2-3 stocks. This will help balance your trade strategy and minimize your risk.
- Determine Entry and Exit Prices: You should determine your entry-level and target prices before deciding to put a purchase order.Many stock traders suffer from buyer’s error. This is when the buyer immediately has a change of mind after purchasing a stock. The trader suddenly feels that the selection was not as good as he believed it would be at the time of purchase.
- Set a Stop Loss Level: It is always a possibility that the stock you chose to buy at a specific price, falls on the day you decide to trade, instead of rising. You need to decide how low the stock can be allowed to fall before you square off your buying position. Good traders keep a stop loss at 1/3rd of the expected benefits. This is one of the most significant tips and strategies when it comes to intraday trading.
- Research your Target Companies: Research is the most important aspect of trading. When you identify the stocks you want to invest in, make sure you research them thoroughly. Being up to date with the stocks is very essential.
- Not More Than Two Trades Per Day: It is a very bad idea to initiate various trades during a trading session. Experienced traders also avoid initiating more than 2-3 trades in a day. The reason behind this is that, stocks are extremely volatile for intraday trading, and the trader is on toes until the position is squared off.
- Devote Adequate Time: Intraday trading may sound simple, but it is a full time job. It is not for the individuals that juggle two jobs. Traders need to observe the market fluctuations all through the day from the opening(9.30) bell till its concluding(3.30) . It helps them make the right decision in order to earn more profit.
- Do not Move in the opposite direction the Market: Even the most experienced traders cannot predict which way the market will sway on any particular day. So as far-fetched as it sounds, do not move against the market. The moment you think that the market is moving against your paln, prevent enormous losses and exit the trade.
These were a few tips and strategies for you to know before you venture into the world of intraday trading. There are various websites available that provide intraday tips and strategies. Right them before making your move. Let us know what you think about our article.