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Top 7 Intraday Tips for Successful Day Trading

Updated on April 10, 2024 , 35076 views

In the world of trading, Intraday trading creates its own space. The term intraday itself means ‘within the day’. It is used to describe stocks and exchange-traded funds (ETFs) that are trading during the day in the Market. Intraday trading also shows the highs and lows along with the stocks that were traded throughout the day. When there is a ‘new intraday high’, it signifies that security has reached a high place compared to other prices in the trading season.

Top 7 Intraday Tips

As an intraday trader, you have to keep a number of aspects in mind to be successful. This article will inform you about the tips to be a successful intraday trader. Get these free intraday tips on your mobile.

Best Intraday Tips for Trading

1. Buy Stocks Trading High

If you are an intraday trader or wish to be one, there is one important aspect to note — buying and selling stocks on the same day. Yes, intraday traders purchase stocks with an intention of selling them on the same day. However, the unique aspect about it is that an intraday trader never really buys a stock or takes delivery. An ‘open position’ is created when a stock is purchased and for the position to close, the stock has to be sold. Otherwise, the trader will be required to pay for it and sell it on a later date. This is exactly when the trading volume comes into focus. It refers to the total number of shares of a particular firm that is traded in a day. It is reflected in the trader’s ability to open positions.

Intraday traders usually focus on the price of the stock since the main focus is to buy it low and sell it high. This focus usually causes the majority of the intraday traders to ignore the stock volume.

As an intraday trader, you should buy some shares with high trading volume because it helps you maintain liquidity otherwise, low trading stocks will lower your liquidity holdings.

2. Don’t Make Spontaneous Decisions

As an intraday trader, make sure to not take decisions on an impulse. This is because it is important that you know the price you want to enter and exit the market before even entering. Yes, you will face a circumstance where the changing nature of the market may cause you to take decisions on an impulse. However, the point is to not let such circumstances lead you into making an uninformed decision that you might later regret. It’s your hard-earned money after all. Therefore, make sure to have an idea about what you are purchasing and setting the target price before even trading.

Target price and buying price are two of the main ways you can understand the value. Your target price should be slightly lower than the expected price of the stock on the day. You should purchase stock when the price falls and reaches a horizontal zone.

However, remember that there is no hard and fast formula to determine values. It's experience and constant learning that will help you to find the perfect combination that works for you.

3. Wait for 1 Hour before Trading

Many traders are usually in the race to take market positions in the morning as soon as it's open. This is one of the most important intraday tips to consider. Historically speaking, most price movements take place during the first hour of the market opening and the last hour before it shuts. In the morning, traders might be responding to the market performance from the previous day.

This can disrupt the prices and may cause beginners and even intermediates to panic. But don’t worry. Make sure that you don’t jump into this race unless you have a well-researched understanding and idea of how you can profit in the first hour. Trading in the morning is pretty expensive.

According to a report, it is recommended that new traders sell before 1 pm since most traders begin booking profits after 2 pm. So, if you are new to the world of intraday trading, buy your stock after 11 am or 11:30 am in the morning and sell it before 1 pm.

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4. Don’t Trust Rumours

Rumours spread like fire because all modes of communication today works largely on the internet and television. Make sure to cross-check any information you receive from trusted sources. Always keep updating your research so that you don’t fall victim to rumours that can lead to huge losses.

5. Keep Learning

If you wish to be a successful intraday trader, make sure to never stop learning. There is no limit that you need to reach here. Keep learning about stock markets and the frequent changes that occur and how it affects the functioning. Read books, blog posts by successful traders and investors to understand how they have tackled various trading situations. Take online courses from websites like Coursera, Udemy and other independent courses which will help you stay in touch with everything about the trade.

Keep up with this intraday tip and over time, you will be able to come up with your own strategy for trading and everything is uphill from there.

6. Go for Liquid Stocks

Buying liquid stocks are one of the most important elements to keep intraday trading going on. There has to be enough liquidity in the market, therefore, as an intraday trader make sure to steer clear from small cap and mid cap funds that are not having enough liquidity. If not done, you may not be able to get the squaring off order executed and you will have to go for the delivery instead.

Also, remember to never invest your trading money all in a single stock. Consider this as an important intraday tip. Diversify your purchases and minimise risk.

7. Research Your Favourite Companies

Never invest or buy a stock from a company just because you like it. This could lead to uninformed and biased decisions which may usually end up in a loss. Always do your research about the management, expenses, Net worth, net sales, Income, etc before deciding on where to invest.

FAQs

1. Is there a difference between Intraday trading and regular trading?

Yes, there is a small difference between both. The timing of the delivery of the shares is the difference. When a trade is done on the same day without changing ownership to the trade, it is intraday trade. However, if it is done over a period of several days, months, years it is regular trading.

2. I’m a regular trader. Can I participate in Intraday trading?

Yes, you can participate in intraday trading. There is no age or gender bar. However, if you have a day job, refrain from participating since the core of intraday trading is about trading in the day.

3. Which stocks should I prefer in Intraday Trading?

Historically speaking and even according to reports, it is advisable to look for stocks with high liquidity.

Conclusion

Make sure to take into account all the tips and apply it if you wish to be a successful intraday trader.

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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