About Intraday Trading
Intraday trading means buying or short selling stocks or taking long or short positions in securities and squaring off the positions before the end of the trading day. The day trader can executes his buy and sell order in a gap of 1 min, in a 1 hour or even in 4-6 hours, but he should square off his positions before market close, is term as day trade. The tools and techniques used for Intraday trading are fundamentally different from those used for long-term investing. Day trading requires two entities / traders for a trade, one trader to sell and the other trader to buy the same stock. The stock market is very volatile; it can go up and sometime can come down too. A day traders should not trade and depend only on the market going up. A trader can make a profit even when the market is going down, by first short selling the stock and covering his short sell order by buying the stock at lower price after some time, before market close. Technical Analysis i.e Reading charts, using technical indicators should be done before you do day trading in a particular stock in NSE share market.
A trader needs to do good research to buy stocks for Intraday trading, and he should as per the market trend. Intraday traders have to be quick on their moves of buying and selling with strict stop loss. Trader should know and follow some strict Discipline which is very important if they really want make gains in day trading.
Here you know what is important before you try Intraday trading.
Important to Know before you Try Intraday Trading
- Open a Demat cum Trading a/c.: You will be needed a Demat cum Trading Account to start your trading. We want every day trader do proper research and read the terms of services before you register with a good broker and fill their forms to open your trading account. Account opening charges, Annual Maintenance Fees, Transaction fees should be discussed and compares with available broking houses in your local area/ city.
- Learn to Use the Trading Software: Before a trader Execute his First Intraday Trade a trader should learn to use the trading software, given by his broker to trade in share market. He should know how to put buy / short sell orders in NSE market. He should know about market orders and limit orders too. He should have knowledge of putting stop loss orders. He should learn about equity, stock futures, options, trading indicators etc.
- Trade with the Extra Money not Emergency Money: Trader should keep aside some emergency money and use only the extra money he has to do day trading. Day trading can be risky, as any bad news can make market crash at any time, and any good news and make it go higher in matter of minutes. Also trader has to keep some emergency money with him, which he should not use for day trading. This is because In any case, if any day trade goes the other way and trader suffers loss, this should not matter to his day to day life.
- Do Paper Trading: Paper trading also called as Virtual trading or trading without risking your money. To avoid your capital losses, we advise trader to do paper trading before they actually start trading in NSE market with their real money. When they start making profits doing paper trading, we advise them to shift to actual online trading with your own hard earned money.
- Proper Entry and Exit: Traders should have several day trading strategies to determine when to enter at a particular price and when to exit at correct price. A combination of support and resistance prices of a stock can be used to take call on day trading entry and exit levels. Timing is the key in Intraday trading. If trade happens on a proper time, you can make profits and vice versa.
- Smart and Consistent Trading Plan: You need a trading plan because it can help you make logical trading decisions and define the parameters of your ideal trade. A good trading plan will help you to avoid making emotional decisions in the heat of the moment. A trader should prepare a smart plan and stick to his day trading plan, which includes his daily trading goals, his available capital for daily trades, his time commitment, his attitude to risk etc.
- Choose liquid stocks: A Day trader should trade in highly liquid stocks, he should stay away from Volatile stocks as well as in penny stocks. Normally Stock listed in Derivative Segment, Futures segment, Nifty 50 stocks or Nifty 100 stocks have very good volume and traders should choose stocks from the same. To succeed as a day trader, it is important to know how to pick the right and liquid stocks for Intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade during the day.
- Record your wining / Losing Trades: A trader should records his winning as well as loosing trades. This habit of recording or writing your trades enables trader to learn from past trading mistakes and improve his judgment during day trading. He should learn from his loses and also learn from his gains too. This will make him more perfect and his success rates in day trading could go up higher day by day.
- Keep Tap on News: He should watch financial news channels like CNBC Awaaz, Zee Business, NDTV Profit, ET NOW, CNBC TV 18, CNBC Awaz etc so that he is updated with the latest happenings in global as well as Indian markets. Change of govt. policy, news likes a war like situation, government changes in general elections, and earthquake can have sudden negative impact on the market. You will be updated with the news by this TV channels if you watch them during market hours, when your money is at stakes.
- Stop loss: A trader should always trade with a stop loss in day trading. He should Strictly Follow the Stop Loss Decided at the Time of Buying or short selling the stock when he is doing day trading. He should not Change the stop loss in any circumstances to avoid big losses of his capital.
- Ignore Rumors / Hot tips: Don’t trade on rumors, hot tips of penny stocks received by SMS or phone calls from unknown people. Do your own technical research by reading charts, indicators, if you don’t have the time to do research then you should hire the services of a Investment advisory like A1 Intraday Tips.
- Don’t Over trade: A trader should put less trades that to in a limited quantity as per his capital and risk taking abilities. Over trading is likely to turn his small profits in to big losses.
We at A1 Intraday Tips team have tried to give in-depth information about what a day trader should know before he jumps in sea of money i.e stock market to do day trading. A new Trader should start trading with low capital and increase the capital, when he gets more wining trades then the losing ones. No trader can make daily gains doing day trading in his entire life, sometimes he can have losses too, but if he learns from his mistake, he can surely make money from stock market.
If you are looking for the best intraday trading tipsA1 Intraday Tips will help you to gain maximum profit with minimum risk by providing the free intraday tips. For Free Trial you can register here to avail our Free Intraday Tips for 2 days. You can also download A1 Intraday Tips mobile app here. For more information call us at 07506090788 / 07600797534.
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