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.
Intraday Trading Tips in India
To avoid incurring a loss in intraday trading, we have curated a list of some of the most useful intraday trading strategies. Here are some tips which may help investors to invest with precaution:
- Understand the terms of the intraday market such as long position, short position, stop loss, IOC, support level, and resistance level where:
- Long Position: It is buying on the belief that the share price will increase by the end of the trading session.
- Short Position: It is buying on the belief that the share price will decrease by the end of the trading session.
- IOC (Immediate or Cancel): It is an order that must be executed immediately in the market, as any unexecuted order will get cancelled.
- Support Level: It is the base price below which the share price of the company does not fluctuate.
- Resistance Level: It is the opposite of the support level, which is the highest price of the share that is taken into consideration.
- Stop Loss: It is the range an investor sets. If the share goes below this value, the brokerage will automatically share the same at a price set on the stop loss.
- 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.
- 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.
- Another one of the significant intraday trading tips India is that 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.
- 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.
- 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.
- One of the most interesting intraday tips is that 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.
- A very important thing an investor must consider is to determine Entry and Target Prices before he/she places the buy order. An investor’s mind usually dwells from time to time while purchasing shares. He may end up selling even if the price tends to observe a nominal increase.
Because of this, you may happen to lose the opportunity to gain higher gains due to an increase in price.
You may also want to read Intraday Trading Guide for Beginners in India
Intraday Trading Tips for Beginners - Key Takeaways
- There are various charts to indicate the performance of the share, such as bar charts, graph charts, candlestick charts, and 5-minute and 15-minute charts.
Through these, investors can get an idea of the performance of a share and can trade accordingly, considering stop loss and booking of profit.
- Never rush in trading sessions; research the stock well and then invest in them. Some investors listen to random tips without doing their own research on investing in shares and end up losing money.
- Choose the correct reference sources for analyzing the share market.
Intraday trading requires an immense dedication of time for proper analysis, research, and going through the performances; hence, make sure you make the most of these intraday tips for today, tomorrow, and forthcoming trading days.