Intraday trading is a trading strategy in which investors invest their money in shares as soon as the share market opens or at any given time in the day and sell the same investment by the end of the trading session, which is by 3:30 pm. There is either a profit or a loss by the end of the day, and this excites the investor to trade more intraday as, if there is a profit, the investor has earned that much in a day.
To avoid incurring a loss in intraday trading, here are some intraday trading tips which may help investors to invest with precaution:
2. Your intraday portfolio should always have two or three liquid shares, which are generally large-cap company shares recommended for squaring off the open positions.
3. Research the shares that are in the news and invest in them, as the increase in demand will increase the volatility of the share and may give good profits in the intraday trading session.
For example, Pharma companies’ shares were perfect for intraday trading when the government was approving vaccines for corona.
4. Investors should always have a calm, clear mind while determining the stop loss limit in share trading. Sometimes after a dip, the share price again rises to a high. But this is not conclusive, so keeping a stop loss value will automatically sell your share before going into a dip and prevent the investor from incurring a loss.
5. Vice versa, the investor should not be greedy when the share hits an all-time high in the day trading session with the mindset that it may increase some more because the chances are high that it may go south. Hence, an investor should book profit at a good profit level and exit the share with the target achieved.
6. The stock market is never predictable. Some investors do fundamental analysis while some may use technical analysis, but still, both suffer losses as these analyses are not concrete and are merely indicative. Thus, if an investor feels that there may be a rise in the stock price based on his analysis, but in reality, there is a steady decline, an investor should not wait and must sell off the share before facing a huge loss.
7. Investors in intraday should trade safely with their finances as, in the hopes of larger profits, an investor may pitch in large sums of money and end up losing the same. This has happened in the past as the stock market is said to be unpredictable. Hence, investors should only invest the money which is in surplus or would not impact their livelihood in any drastic manner.
Q1. What are the timings of an intraday session?
The market opens at 9:30 am every morning from Monday to Friday and ends at 3:30 pm. The market remains closed on Saturdays and Sundays and public holidays.
Q2. What are the other factors which can affect intraday trading?
Investors should also keep a close watch on stocks that are under the radar of the regulating authority of the stock market (SEBI), which are inflated in price.
Q3. What happens if the intraday target is not achieved?
Many investors book the share for delivery if the target of the same is not achieved. However, this is bad practice; the investor should always ensure that they close all the open positions before the end of the trading session.