Intraday trading is a method of trading where you buy and sell the stocks within the same day. You won’t carry the position for the next day. This is also called as day trading. If you know how to do intraday trading, you can make huge money out of this at the same time if you don’t know the working of intraday trading you might make huge loss also. You can also take assistance from experts in selecting the stocks to trade.
Intraday trading looks to be one of the simplest and most rewarding trading methods. If you want to be a successful intraday trader, you have to be very fast and quick. Intraday trader should be very keen and alert always. Strategies for Intraday Trading range from holding a position (buy/sell) for a fraction of minutes to holding until the end of the day. Basically markets are very dynamic in nature. There is no tailor made strategy that fits for all. You need to learn and analyze the strategy and apply whatever fits for the moment. You need to consider a broad range of information to determine which strategy will best suit for the market for the moment. This is where the importance of knowing how to do intraday trading is used. Intraday Trading if done correctly can be a very good source of regular income. This article will help you in understanding the basics of intraday trading.
See Also: Day Trading Strategies For Beginners
Following are the major advantages of Intraday Trading
Intraday Trading/ Day Trading are one of the most attractive ways of making money. It is a money game; experts can make huge money, at the same time one who doesn’t know anything about the market may lose huge money. Understanding the below given points will help you in creating a fair idea about intraday trading.
If you want to participate in intraday trading you should have enough savings with you. You can use 10 – 15% of your savings every day for intraday trading. If you don’t have good money backup with you a considerable loss in the market can place you in financial problem. So before entering in intraday trading make sure that you have enough savings.
There are different kinds of traders in the market such as day trader, swing trader, short term trader, long term trader, etc. before trading you need to decide what kind of trader do you want to be? A Day Trader works in the market every day and requires more research, monitoring of the market, supervision, guidance, etc. before trading you should have a clear plan about your trading pattern other strategies.
To start trading, you need to open a demat account with a broker. He can help you in placing the orders and all other issues related to trading. While choosing the broker you should be very careful, you need to know about all the charges and commissions imposed by the broker. Their past performance in the industry plays an important role in selecting the broker.
The language used in stock market is entirely deferent; a common man may not be able to understand the technical terms used in the field.You must know what you are asking for and when you listen to the talking heads sharing their opinions on news channels, you need to know what they are talking about.
There is a learning curve in trading, until you learn to read the chart, read the mood of the market and recognize how to play. Till you learn that invest small amount in different stocks, you might make loss but experience will make you an expert and will help to generate huge profits in future.
Your first trade is the most important, but if you lose money, don't get panic. In the initial stage it is better to take the help of stock experts like IndianMoney.com. Till you learn the processes just stick to the plan with a set entrance and exit strategy.
While trading set a profit goal (Target) and a loss goal (Stop Loss) and place orders for both. If the stock price drops below a particular limit, your stop loss (loss goal) will save your capital. If you put your money in a gaining market, greed won't take over your profit because it will be triggered in your profit goal. Think if you don’t have a profit goal (target) you will keep your money in the market till the market ends in this case, if the market is coming down again you will lose all your profits.
Stock trading can be a great way to make money but you should learn to read human behavior. You can never control the market. But you have control over how you read the market, how much homework you do to reach your goals, etc. Always try to understand the market pulse.
See Also: Indian Money Market
Most successful day-traders are those that have a system or method in trading and stick to it over a period of time. There is no "magic formula" to achieve success in intraday trading. Most day-traders plan their trades with a theory or method they have faith in and continue this process over a period. Discipline is very important for an intraday trader. Following are some of the useful points to be kept in mind while doing intraday trading.
There are a number of tools and techniques available for intraday trading. But it is advisable let professionals do all these study for you. You just sit back and have Tips from IndiaMoney.com research team. Happy Investing!
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
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