Best Intraday Trading Tips, Tricks and Strategies

What is Intraday Trading?

Intraday Trading is buying and selling of shares on the same day. Traders aim to capitalise short-term price movements to make quick gains. They monitor the price fluctuations and chart patterns to identify the buy/sell opportunities. Intraday trading is highly risky and takes skill sets to make money out of markets.

Useful Intraday Trading Tips and Tricks

Below are a few useful intraday trading tips and tricks which can help traders to make informed decisions.

• Select One or Two Liquid Stocks: While doing intraday trading its important to trade liquid stocks only. Large cap stocks are highly liquid, so it’s good to choose large cap for trading. To get better results in intraday trading, trade only one or two stocks. Each stock has its own price behaviour, so it's better to master one stock and trade it regularly.

• Develop a Trading Plan: Before entering into any trade, it's important to develop a plan. A trading plan is a set of rules written by a trader itself, where to buy and sell. It helps traders to keep on track and be disciplined.

• Trend Analysis: In trading, trend is friend. While planning for intraday, identifying a short term trend can give an added advantage. Try to execute trades in the direction of a trend, it increases the probability of winning.

• Risk Management: Risk management is the backbone of trading. Before taking any trade the risk must be defined. How much a trader is willing to take risk for a favourable outcome.

• Trading Strategy: Trading without a strategy is like firing blind folded. Trading strategies help traders to take high probability setups and avoid noise during the live market.

Intraday Trading Strategies

Intraday trading is tough but strategies can make it a little bit easier for a disciplined person. Here are some intraday trading strategies:

1. Open Range Breakout: ORB involves observing the first 15 to 30 minutes of the trading session. Stock usually establishes an opening range in the first fifteen to thirty minutes. When the stock price breaks the upper side or lower side of the range, it creates an opportunity for an intraday trade.

2. Gap and Go Trading Strategy: This trading strategy allows traders to capitalise on gap up or gap down opening. When the stock opens gap up by more than 1% or 2%, it can be due to some positive news behind it. Traders can put strict stop loss near previous day high or opening range low and take a buy trade. Same goes with at the time of gap down, but here traders will short sell.

3. Momentum Trading Strategy: It involves buying stocks that are trending upside and selling those that are falling down. The key principle of this trading strategy is buy high and sell higher for long positions. Whereas, for short positions, it sells low and buys lower.

4. Reversal Trading Strategy: In this trading strategy, traders try to identify the major reversal points. The trend reversal happens stock price stops moving in an upward direction in the bullish trend and downward in bearish trend. It usually happens due to shifts in market sentiment.

Risk Involved in Intraday Trading

Intraday trading is risky due to several factors that can lead to financial loss. Factors such can market volatility, high leverage, psychological risk and more. This can affect your overall trading performance in the long run. Therefore, it's important to understand the risk and take positions accordingly.