7 ADVANCED STRATEGIES FOR SUCCESSFUL INTRADAY TRADINGby Ben Wane Consultant
“The goal of a successful trader is to make the best trades. Money is secondary.”- Alexander Elder
You would have heard of trading and investing. Is trading and investing the same or different. Let us begin investing means buying stocks and holding them for a long period whereas trading means buying and selling stocks for a short period. There are mainly two types of traders: Intraday trader and Positional trader.
An intraday trader buys and sells securities on the same day, they need to square off securities before the market close on the same day, Positional trader buys securities and hold them for a long time.
To begin with intraday trading, you should have your Demat account and trading account, if you don’t have to open it with any stockbroker.
Once you open a Demat account and trading account you can start your trading journey. Not all intraday trader earn a profit, here are some strategies which will help you to earn profit:
1.) Study the stocks
Not all stocks are intraday stocks, you need to study which stocks are good for intraday trading, for that you need to study which stocks are liquid and volatile in nature so that movement of price help you make money.
2.) Entry and exit
Once you know which stock to be invested in, you must analyse what is the best time to enter the market that is when the prices are low and when to sell the shares, so that maximum profit is earned.
3.) Go with the trend
The next strategy is to analyse the trend and predict the prices. It indicates when the prices are high and when they are low.
This can be done with the following indicators: first is Exponential moving average (EMA) it is a type of weighted moving average that gives more weightage to recent price data.
The next indicator is moving average convergence divergence (MACD) it tells the difference between two moving averages. The MACD chart shows a blue line and a red line the blue line is the difference between 12-26 days EMA of the price and the red line is the 9 days EMA of the price. When the blue line crosses or overtakes the red line, it is the buying zone and the red line is to cross the blue line immediately sell the shares.
How to predict that the red line would overtake the blue line?
The next indicator is parabolic SAR it is used to determine the price direction of an asset, it appears as a series of dots. as the series of dots shows an upward movement the blue line would overtake the red line as soon as the parabolic SAR shows the downward movement it indicates that the red line will overtake the blue line.
4.) Don’t be greedy
If you can decide which stock to be invested in and the entry-exit point with help of the above indicators you are going to earn profits. We know that profits are tempting and once we starting earning profit it tempts us more and we make mistake in the circle of greed. So, avoid mistake and don’t get greedy.
5.) Stop loss
If you are trading in intraday never for, get to place a stop-loss order, this will help you minimize the loss in case of a downward trend market. The stop loss is the maximum amount of loss you can bear. Always put a stop-loss order if you are an intraday trader.
Some other strategies that will make it easy for you to trade in intraday
6.) Momentum trading strategy
This strategy means the prices move as the trend moves that is if the trend is upward-moving then the prices will go up, and if the trend is downward moving then the price is falling. In this strategy, if the stocks are moving in one direction it will follow the same. This strategy is used generally when the market is opening that is in the morning, if the trend is upward then the prices will rise and vice versa. The stock screener will help one to analyse the stocks that would rise 10-20% daily and analyse the trend.
7.) Bull flag strategy
In this strategy, when there is strong price movement it forms a flagpole, subsequently systematic and diagonal movement of price making a flag pattern. It shows vigorous price rise and then pulls back. There is a lot of patience required in this strategy as a trader has to wait for the flag to be formed after the pullback.
8.) Swing trading strategy
In this strategy, traders earn short to medium-term gains in the stock over a period of weeks or less. Traders use technical analysis to analyse the stocks and prepare the stock research report. This is also known as a reversal trading strategy.
With the above investment strategy, one can prepare their stock research report with the help of a stock screener.
Just remember one thing if you are an intraday trader “I know where I’m getting out before I get in”.
Created on Jun 12th 2021 00:30. Viewed 144 times.