Top 10 Intraday Trading Tips and Strategies

Intraday trading is the act of buying and selling stocks within the same day or even multiple times throughout the day. When you play out your cards correctly, the constant fluctuation in the market can work out just perfectly in your favor.  

 

People, especially beginners, often tend to think that they need to make investments in bigger companies for better profits. However, it is all a myth. One can gain high scales of profit from a young company in New York or a midscale escape room in Bangalore, too, if they know how to play the game. 

In this blog post, we will be sharing the top 10 intraday trading tips and strategies that’ll help you to ace the stock market game.  

  • Go for liquid stocks 

Intraday trading is all about buying and selling stocks within the same day before the market closes. This means that you need to square off all your open positions, which requires enough liquidity in the market. Hence, it is advisable to go for stocks with high liquidity trade. Otherwise, you might not be able to square off your stocks at the end of the day and take delivery instead. Do not invest all your money in a single stock. A diverse approach would help create a balance and minimize your risk. 

  • Fix an entry and exit price  

The stock market is a tough terrain to tread. This oftentimes leads to intraday traders falling prey to the buyer’s fallacy. Misleading notions often lead them to believe that they entered a stock selection that isn’t good enough, contrary to what they initially believed. A simple solution to this is to fix an entry and exit price for yourself. Fixing an entry and exit price would not only help you gain an objective perspective but also help your feelings not get the best of you. The stock market is just not the place for emotions but logic. 

  • Decide upon a stop-loss level 

The market fluctuates throughout the day, which is why it’s crucial for you to invest very intelligently. It is very much possible that the share that was predicted to have a rise at the end of the day actually suffers a fall, leaving you bearing a loss. Hence, it is very important that you have decided how much loss you are ready to bear beforehand. This helps in minimizing your risks and, as the name suggests, stopping your losses. 

  • Do not let your greed get the best of you

 

 

If you’re into intraday trading, you must be setting a daily target of profits for yourself. A successful and smart intraday trader is one who doesn’t let greed get the best of them and book their profit once the goal is reached. The unpredictability of the stock market also increases its volatility. Don’t lead yourself to believe that the prices might rise further, especially if it’s only what you ‘feel.’ Your decisions need to be made rationally and not emotionally. 

  • Make sure to close all your open positions 

Oftentimes, intraday traders choose to take delivery if their target isn’t reached. This is a very risky approach, given the unpredictability of the market. A company that you invested in today might just declare itself bankrupt the next. It’s almost foolish to treat intraday trading as a long-term investment. Closing all your open positions by the end of the day will help in minimizing overnight risks.  

  • The market is not the one to be challenged 

The stock market is an unpredictable territory. Even with all the estimations of profit, one might just end up suffering a loss. Because, at the of the day, those profit estimations are still ‘estimations.’ Hence, we advise you to take risks as far as you can bear and not be foolhardy about it. 

  • Timing is key 

 

 

Profits in intraday trading rely on time. It’s not a smart move to assume a position immediately within the first hour of the day because that’s the time when the market is especially volatile. Observe how the market fluctuates in the morning, noon, and closing time. The key lies in being attentive to details and timing your moves correctly.  

  • Penny stocks are a no-go 

Deals at low prices can be very enticing, but make sure to stay away from penny stocks. Not only do penny stocks cease to make profits, but also, they aren’t liquid. Moreover, many times, penny stocks get delisted from major stock exchanges. Until and unless you’ve done your research, steer clear of these. 

  • Make sure you have time 

Intraday trading is time-consuming. This means you can’t be too involved with it if you’re a busy person. Hence, only opt for this when you are sure that you can spare most part of your day for it. 

  • Maintain your cool  

The volatility of the stock market can drive one crazy, making people act on their emotions. Greed, hopelessness, fear, all these are feelings that the stock market has no value for. Hence, be rational and be calm. 

 

Final thoughts  

Intraday trading requires one to be tactical and rational. One thing that might help you out is to learn the technical analysis that will help you gain further knowledge about the market.

 

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