What is Intraday Trading - Learn how to do Intraday Trading!

Analysis of Intraday Time

When it comes to intraday trading variations and movements, the most useful tools are the daily charts. These can provide all the necessary trading information with indicators showing the trend of a specific stock over a specific period of time. They transmit the price movement from the start to the close of the market. Time analysis becomes a useful tool for intraday trading as momentum tends to change quickly. You won't be able to understand the charts until the stocks you invest your money in fall or surge sharply. Therefore, it is necessary for day traders to look for charts that will help you better understand the flow; We've covered these concepts in detail, what you should know when investing in day trading.

     

How to select stocks for intraday trading?

Stock selection is the first and most important step in day trading. After all, the money invested is only worth it if there is something in return, otherwise it's done. So how do you choose stocks wisely? We will see.

• Avoid Volatile Stocks: It's always best to stay away from things that clearly seem volatile. Why invest your money in something you may never get back? Therefore, it is prudent to follow the behaviour of stocks and consider trading potentially stable stocks.
• Correlation of stocks with geopolitical changes: It is preferable to invest in stocks which show a correlation with the main sectors. If the sector index increases, this could also have a positive impact on the share price. For example, a strengthening of the Indian rupee against the Chinese renminbi would hurt the iron ore industry. This would increase export earnings and increase stocks. Choosing stocks given such a market situation would help you a lot.
• Research: Watching, analysing and understanding are the basic steps of trading. Nothing happens without proper calculation, unless you are very lucky when trading. As the odds usually don't work in your favour, it is always necessary to do your research before trading.
• Trends: Sometimes following the pack is better than being a lone wolf. Look for the general market trend or stocks that have generated the most interest from traders. When the market is rising, traders should look for rising stocks; When the market is down, look for stocks that show potential for decline.

Five things to know about intraday trading:

1. Commercial Strategy

Day trading is a strategy where you buy and sell your stocks on the same trading day. Traders thus profit from price fluctuations that occur during market hours. If the trader expects the price to rise throughout the day, he will first buy a large number of stocks and then sell them at some point during the day. The reverse can also happen, called short selling. To take advantage of the market decline, traders would short sell. This is when they borrow shares and resell them on the market. Once the price drops as needed, traders buy shares at the lower price and then return them to the lender.

2. High Risks

Because day traders essentially exploit volatility, they are exposed to a lot of risk. This is much higher than the risks taken by a long-term oriented equity investor. As a result, day traders tend to be big risk speculators. They usually do high value trades worth thousands of dollars and crores of rupees using margin trading. (Use hedge orders and support orders to take advantage of high Upstox spreads.) However, intraday traders can also make windfall profits.

3. Effects on the Share Price

They often influence the development of share prices. For example, a stock is trading in the range of Rs 100-102. Intraday or day traders decide to bet on the stock and 1,000 shares at a time. Therefore, the demand for shares suddenly increases. This leads to a slight price increase. Once it reaches a certain level, traders sell their shares. This in turn drives prices down.

Technical Analysis: Because day traders only care about stock price and volume volatility, these traders rarely consider the financial profitability of the underlying company. They usually use technical analysis. This involves analyzing the stock's historical price and volume trends to forecast its future price. Technical analysis helps determine the right conditions for buying and selling stocks. This usually takes a lot of time and effort. As a result, day traders are often full-time traders, closely monitoring every stock movement.

4. This is How Day Trading Works

The first step is to select stocks that have a high trading volume. This means that they are very liquid. This could include penny shares - small company shares costing as little as Rs 20. Pick a maximum of two or three stocks at a time. It would be difficult to monitor further actions. Decide the price at which you want to buy and sell: your entry price and your target price. Most importantly, make sure you have a stop-loss order that acts as a safety net. This will help reduce your risk. Once you place your order, watch closely and exit when the price hits your target or stop loss level.

5. Delivery vs. Intraday Trading

When you buy shares cash on delivery, you can do almost anything with them. You can keep it for as long as you like or resell it the next day. It all depends on what you want to do with it. Whenever you feel the market is going up or the stocks you own are worth enough to trade, you can sell them for a profit.

With intraday trading, you have to sell the shares on the same day before the market closes. If you don't do this, there can be two outcomes. Some online platforms automatically convert these stocks into delivery transactions and charge a brokerage fee so you can sell them at a time of your choosing. Others simply settle your trades at the market price during the close time even if you are losing and unfortunately you have to take the losses.


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