Intraday Trading Strategies

April 8, 2021

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Intraday is highly profitable, but it can be dangerous for the new traders if they don’t approach it strategically. With proper analysis and execution, a trader can get handsome returns from intraday trading.

There is a myth with intraday trading, it’s all about buying and selling the stocks. No doubt, intraday trading requires more focus and attention than other investment options. About 85-90% of the time you need to put on the strategies for intraday trading, like planning and analyzing, 10-15% of the time goes to the executions.

Hence, you have to devote your time if you want to become a successful intraday trader. Be prepared to sit in front of your trading screen throughout the market trading hours.

Before we start talking about intraday trading strategies, we would like to mention that no intraday trading strategy offers you the guaranteed results. Market condition plays a crucial role in the return.

Hence intraday traders must be flexible and practice multiple strategies while trying to adjust the multiple scenarios. Below we have mentioned some no one told intraday strategies that can make your stock market game stronger than ever.

Strategies for Intraday Trading

1. Choose two or three liquid shares

Liquid stocks are those that have large volume trading throughout the day. One of the most critical things in intraday trading is to find liquid stocks. This is important for two reasons;

You can sell large volume shares without impacting the trend you want to benefit from.

The trades you lineup have the potential to be executed quickly.

Intraday trading involves squaring open options before the end of the trading sessions. This is why it is highly recommended to choose the large-cap shares that are highly liquid. Our intraday trading strategies don’t advise you to focus on the small and mid companies because they have low share volumes.

2. Determine Entry and Target Prices

Another significant intraday trading strategy is determining entry and target prices. Before purchasing the stock, you must determine your entry-level and target prices. Generally, our psychology changed after placing the order.

As a result, you may sell even when the prices seem nominal, and you end up with less gain because the prices get increased. This strategy for intraday trading enables you to take advantage of the higher gains when the prices get high. To determine the target prices, you can take the help of fundamental and technical factors.

3. Utilizing Stop-Loss for Lower Impact

Whether you read intraday trading in Hindi or English, everyone encourages you to use stop-loss for lower impact. Most intraday traders benefited from implementing a stop-loss order. A stop-loss order is an order placed with a broker to buy or sell a specific stock once the stock reaches a certain limit. It is a trigger that automatically sells the share when the price falls below the specified limit.

This intraday trading strategy is designed to limit an investors’ loss on a security position. An additional benefit of stop-loss order is it eliminates emotions from decision making. Investors tend to fall in love with stocks. You can also read this intraday trading in Hindi for a better understanding.

4. Book Your Profit When You Reach To Your Target

Traders either suffer from greed or fear, or both. This intraday trading strategy says it is imperative for investors to cut the losses and book their profit when they reach their target.

In case if an investor thinks there is a possibility of increasing the prices of the stock, the stop-loss must be readjusted to match these expectations. One of the simplest techniques to set the profit target is to use a fixed risk: reward ratio.

The profit target’s positive aspect is that risk/reward is known before the trade is even placed. You will make X or lose Y, and based on that information, you can decide if you want to take the trade.

5. Be a Trader Rather Than Investor

This is the simplest yet the most effective strategy for intraday trading. Many traders can’t comprehend between trading and investing. Stock trading is all about buying/selling stocks for short-term profit, like intraday trading.

Whereas investing is about buying stocks for long-term gains. Traders often take advantage of small mispricing in the market. If you are interested in intraday trading, then work and behave like a trader, not an investor.

Traders create a plan, stick to the plan, figure out how much money they can afford to lose, and use sophisticated algorithms and analyze the market deeply.

6. Research Your Wishlist Thoroughly

One of the highly effective intraday trading strategies is to keep at least 8 to 10 shares in their wishlist and research deeply. Knowing about corporate events, mergers, bonus dates, stock splits, dividend payments, etc.

7. Don’t move against the market

Another significant strategy for intraday trading is to never move against the market. If you do so, then be ready to face the loss. Even experienced traders with advanced analytical tools cannot predict the market movement because it is highly volatile and depends on many factors. In case the market moves against your expectations, then without thinking much, exit the position, to reduce the risk of losing money.

The stock market is huge; however, you can achieve satisfactory results by keeping these intraday trading strategies in mind.

Now that you understand the intraday trading strategies. In order to help you in more day trading, we will share the most popular and additional intraday trading strategies with you. These intraday trading strategies are well-known and used by all experienced traders.

8. Bull Flag Intraday strategy for intraday

Imagine a stock whose price had risen explosively in the last few days. Once it reached a peak, a pullback started in a diagonally symmetric manner- giving an impression of a flag.

In the pullback zone, high and low are almost parallel to each other. This requires traders to remain patient and wait for the flag to take the shape. They need to find out the upper and lower trend lines, spots of every entry on the higher and lower side, and stop-loss points based on the high and lows.

Whenever you start intraday trading, keep this intraday trading strategy in mind. Because it helps you to generate profits and reduce the risk of losing money.

9. Pull Back Trading Strategy

A pullback is a term that is used to describe short-term move insecurity in the opposite direction of a long-term trend. It gives you a chance to follow the trend without following the security.

In the pullback intraday trading strategy, traders enter the short pullbacks and generate profit. Securities that are trending upwards experience the pullback. And pullback should not be confused with the trend reversal. It is said that the pullback strategy for intraday trading weakness is bought and strengths are sold.

A good move to buy a pullback just after a breakdown. If you are from India, and easily understand things in the native language, you can also learn this intraday strategy in Hindi as well.

10. Moving Average Crossover Strategy

Every stock is moving average that signifies the trend of the stock price. When the security price goes above or below a moving average, it signals a potential change in trend, highlighting the downward trend. If the price goes below a moving average, then it highlights an upward trend. This intraday trading strategy eliminates emotions.

Conclusion

Thus, conclusively, there are several strategies for intraday trading. But the use of the correct strategy at the correct time matters the most. All above-mentioned intraday trading strategies are tired and tested. It enables you to keep your emotions aside and then invest in the market. It is advised to practice these strategies regularly to ace the trading world.