Intraday Trading Tips and Strategy

If you are an intraday trader, should you rely on intraday trading tips? Should you devise your intraday trading strategies? Typically, once you join any of these WhatsApp groups, you will be invited to try out their intraday trading tips today. These intraday trading tips today approach may not always work for you and you should ideally avoid falling prey to them. However, there are some intraday trading tricks that you must be familiar with.

It is quite common for traders to seek some intraday trading tips and intraday trading tricks to enhance profits. However, the best way is to do your research, monitor charts for trading levels, devise your strategy, and measure and manage your risk. Among all the intraday trading tips given to you, the most useful tip is not to rely on any kind of intraday trading tips.

Different standpoint in Intraday trading tips and strategies?

We will look at intraday trading tips and also at intraday trading strategies from a different standpoint. There are several dos and don’ts that you can follow and which can help you substantially in improving your performance in intraday trading. Here is a quick checklist, which focuses less on intraday trading tips and more on intraday trading strategies.

One of the most important intraday trading tips is that stopping loss is a must. Always protect your maximum loss at any point in time. This is the key to survival in intraday trading in the long run.

1. For intraday trading, stock to stock is liquid as measured by average volumes by market cap. Look at liquidity not only in terms of volumes but also in terms of bid-ask spreads. Among all the intraday trading tips, this will stand you in good stead.

2. Don’t put all your eggs in one basket, you could lose all of them. In short, one of the most important intraday trading tips is that you must spread your trading universe across stocks, sectors, and themes.

3. Use supports and resistance levels to identify entry and exit points. Whether you are going long or short, always buy around supports and sell around resistance levels. You reduce your chance of going wrong in intraday trading.

4. Think through your trade and don’t have second thoughts once executed. Also, if stop losses get triggered, don’t worry about the loss. More importantly, don’t fret if the stock bounces back in your direction after hitting the stop loss. That is your insurance.

5. One of the most important intraday trading tips is not to average your positions.If you are wrong once it is OK, but it is not OK to be wrong twice.In many ways,intraday trading strategies are almost the same as regular delivery trading strategies.

6. Keep booking profits and churn money at regular intervals if you are an intraday trader.These may sound like simplistic intraday trading tips, but they make all the difference.There is no greater high in intraday trading than seeing profits and trading the profit.

7. Here are intraday trading tips that are added for your benefit. All intraday trades are closed by the broker at 3.15 pm if the trader does not do anything. Don’t wait that long and make your decision at least 10-15 minutes before that.

8. One of the simplest intraday trading tips is to be agnostic between buying and selling. As an intraday trader, you are just opportunistic. Don’t worry about your likes and dislikes about being a buyer or a seller.

9. The market is right unless proved wrong and that is never possible. In short, the intraday trading tips implied are that you must always respect and follow the market trend. Never try to outsmart the market and markets never make mistakes.

10. If the market movement is not agreeing with your view, then change your view. The market is telling you something you have missed. Try to find what you are missing out on rather than trying to question the market reality.

11. All intraday trading strategies have to be well-researched strategies. Track your company, do your homework, study the charts, analyze the news flows and then trade. Intraday traders also need to work hard on research and analysis.

12. One of the intraday trading tips you must love the most is to make the best of the first hour and the last hour of trade. That is when most of the volatility in the market happens and that is where opportunities arise.

13. These are less intraday trading tips and more intraday trading strategies. Choose a low-cost broker, keep your costs low as they matter a lot in the final ROI. Be clear at what point you will stop intraday trading and go back to the drawing board.

14. There is no ignominy in booking losses. It is part of your game plan. The problem is when you don’t book the loss and keep hoping that the price will bounce back. Never become a delivery trader by default, remain an intraday trader by design.

15. Finally, look at intraday trading strategies for choosing the right stock. The rule is to stick to stocks with a high volume of trading and low spreads. Also, look at stocks that react to the news because the last thing you want in intraday trading is being stuck with low betas.

A final word here. Intraday trading tips and intraday strategies are not about get-rich ideas. They are about discipline and getting the process of intraday trading right. Once that is done, the rest will follow automatically.

Who is eligible for intraday?

Anybody with a Trading Account is fully and perfectly eligible to trade on an intraday basis. There is nothing like eligibility criteria for day trading. If you can bring in capital and manage your risk properly, you are perfectly cut out for day trade. Of course, you can use our intraday trading tips and intraday trading strategies as kind of prerequisites for intraday trading as they will make your journey easier and smoother.

The one condition traders must be aware of is that you don’t try to beat the market as an intraday trader. Instead, you must try to trade the market trend. To be able to consistently trade for the longer term, stop losses and profit targets are a must. If the market does not move as per your view, then the view is wrong, not the market. Day trading is slightly higher risk and high adrenaline, so you must be capable of taking these pressures.

What are trading margins?

In intraday trading, the trading margins are the upfront margins you put to be eligible to trade. Why do exchanges collect margins through brokers? The reason is simple. When you buy or sell in the market intraday, there is price risk. Prices can go berserk, even after your best efforts and analysis. In such cases, who bears the risk.

That is why, even in intraday trading, there are upfront margins collected from the trader so that any loss on the trade can be adjusted. You can enhance your leverage as a percentage of margin by putting in bracket orders that have an inbuilt stop loss. That is a good idea to make the best of trading margins.

Importance of intraday trading?

Here are some key advantages of intraday trading. From a market point of view, intraday trading makes the market more liquid and safer. But let us look at the advantages to a trader in the intraday market.

• There is no overnight risk in intraday trading and that is good because you don’t have control over what happens in the US, the UK, at OPEC,or in China. Any late-night negative news post-market closure does not impact you.

• At the end of the day, there is zero capital blocking as all trades are settled at the end of each day. Unless you make huge intraday losses, your capital remains intact.

• You can multiply profits in intraday trading with high leverage. For example, 5X leverage means your profit is also 5 times. But a word of caution here. Leverage works both ways so even losses can multiply.

• Very important, you can play intraday trades both ways. It is not possible to short sell in the delivery market, but you can do the same in intraday markets by selling higher and buying back lower.

Frequently Asked Questions

What are defensive stocks?

Defensive stocks are normally stocks that have a beta of less than 1. They tend to outperform less when markets are going up but they also underperform to a lesser extent when markets are going down. FMCG and pharma are typical defensive stocks.

What do you mean by booking profits?

Remember the adage, “Profits are what is booked; all else is book profits”. You may end the day with book profits of 10%, but markets may open gap down next day and all is wiped out. Booking profits is actually monetizing your profits and taking money out.

What are liquid shares?

Liquid shares are shares with good trading volumes and low bid-ask spreads. When trading intraday, if you stick to liquid stocks, you risk is much lower. Normally, stock liquidity is measured by volumes as percentage of market capitalization.