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Going for Intraday Trading? Have A Look at These Essential Strategies

Updated on January 25, 2023 , 13271 views

Intraday Trading is a system where you can enter and exit the trade within 24 hours; that is, the holding period could not be more than the same day. However, when you place your feet in this trading system, you must keep in mind that to gain success, you would have to have a lot of dedication, patience, and immense knowledge.

Generally, a successful day trading demands 10% execution and 90% patience. Moreover, it takes a fair amount of time to hone trading skills and get expertise in this system. Fortunately, there are a variety of intraday trading strategies available. Here, in this post, let’s find out some of the most effective Intraday Trading Tips and strategies that you can use to gain the maximum results.

Intraday Trading

Intraday Trading Strategies

Usually, intraday trading strategies last less than a day, or sometimes even for a few seconds or minutes. Although several myths are revolving around the Market pertaining to this trading system, a prevalent perception is that intraday trading can make you rich overnight.

In reality, there could be nothing more wrong than believing it. Not just traders require a practical approach, latest intraday tips but emotional intelligence as well to earn profits from the trade.

If you are a novice, it is imperative to debunk myths before you begin. Generally, people who get success at day trading are good at three important things:

  • They discover tested and tried intraday strategies
  • They execute 100% discipline while implementing these approaches
  • They follow and stick to a firm regime for money management

Most Famous and Common Intraday Trading Tips

1. News Based Intraday Trading Strategy

News based trading is one of the most common types of day trading. Traders involved in this type don’t concentrate on the volume chart and stock price; instead, they wait until the information arrives to drive prices.

This information may come in the form of:

  • Generic economic announcement regarding unemployment or interest rates;
  • An announcement made by the company regarding new products or Earnings; or
  • Simply a rumour about what might or might not happen in the Industry

Traders who find success with this type generally are not the ones with fundamental research or expertise in analysis, but they carry enough knowledge about how the news could be in favour of or against the market.

By concentrating on specific news sources, traders place the order once they get the right opportunity at the right time. However, before you begin trading in this form, one thing that you must keep in mind is that this type of trading strategy could be riskier in comparison to others.

Although it ensures high returns on investments within a single day, but if you are not aware of the best free intraday tips or how to figure out the news and announcements, you may end up losing massively as well.

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2. Early Morning Range Breakout Strategy

Also called as Opening Range Breakout, the Early Morning Range Breakout is regarded as the bread-butter for a majority of traders. Nevertheless, know that this trading form requires practice and skills until you can gain a satisfactory profit out of it.

When the market opens, this strategy helps traders get the maximum benefit of the fierce action from the selling and buying orders in a massive quantity. Generally, the initial timeframe of 20 to 30 minutes trading range is considered the best intraday trading time as it is appropriate for the opening range breakout.

In case you are looking forward to trading with this strategy, the market experts recommend beginning with the little Capital amount. The stock that you will choose should be within a range, basically smaller than the average daily stock range since the lower and upper boundaries of the range can be regarded by the low and high of the initial 30 or 60 minutes.

However, the idea to go short or long is not that easy. First of all, you would have to understand the relationship between price and volume. These two factors should be in harmony. The volume is quite essential for every type of breakout that confirms the break out before entry.

If the price of the stock breaks in morning resistance/ support level with low volume, there could be high chances of a false breakout. Hence, you can regard the high volume as the best indicator for intraday. Considering the volume aspect is quite tricky, you should be able to predict the resistance/ support levels appropriately so as to figure out a good volume breakout and create appropriate targets for profit.

3. Momentum Intraday Trading Strategy

This is one of the best intraday strategies to get the maximum benefit. Before you start with day trading, keep in mind that everything here is related to momentum. While you are figuring the market to get a better hold on it, you may notice that approximately 20% to 30% of stocks move on a daily Basis.

Thus, your job will be to discover these moving stocks before they can make a big move and get ready to catch them as soon as the movement is made. In case, initially, you find this task tedious, you can use stock scanners to make the job easier.

With these scanners, you can seamlessly find moving stocks. The momentum trading strategy is generally effective at the beginning hours of the reading or during the time when news comes in, which can bring a massive volume of trade.

In this strategy, the entire focus should be on stocks that have momentum and are frequently moving in one direction and high volumes.

Conclusion

When you find something too good to be true, at times, believing in it wouldn’t hurt you enough. However, as far as the intraday trading is concerned, being extremely cautious and knowledgeable make things work out for you.

Keep in mind if you managed to yield impressive results in the first hour, step back from trying your luck for long. Get your benefits and walk out of there; or else you may have the risk of losing what you earned.

Prepare yourself for the better and the worst. Learn, acquire knowledge, figure out more intraday trading tips in India and grow with every passing day to become an expert.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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