Articles

Top Tips to Become Successful in Intraday Trading

by Pankhudi Dave Head Finance Manager
As a beginner to stock market investments, you need to start slowly by investing in equities for the medium to long term, especially in the cash segment. Once you understand the various technical and fundamental aspects that need to be considered to gain decent returns from these types of investments, you can explore the option to invest in equities for a short term, which is like just a day. Yes, it is possible to buy and sell your positions in stock on the same day using intraday trading.

Here, you buy a stock and settle your trade on the same day before the end of market hours. While this type of intraday stock trading can give you high returns, it involves high risk as well. Hence, it needs to be practised with a lot of caution and discipline. You need to know about specific intraday trading strategies to become a successful day trader. In this article, let us go through some of these strategies.

Best tips to Follow

•    You should resist the temptation to invest a significant amount in intraday trading positions, to reduce the chances of a substantial loss on any given day. Adopt a practice of spending only a limited sum of money that you can afford to lose in a single day.

•    Put a ‘stop-loss’ trigger on every buy position regardless of how optimistic you are about your stock achieving higher levels on the same day. This will help you to minimise your losses in case the market does not support, or the stock doesn’t move in the intended direction.

•    Shortlist 4 to 5 highly liquid shares which are traded in huge volumes regularly. This would ensure that you could buy such shares at most times without worrying about their availability and also be able to sell them at your target price levels without worrying about the availability of buyers.

•    In addition to identifying shares with high liquidity as one of their significant features, your aim should be to pick out stocks that move around in predictable price range daily, under the average market scenario. This will enhance your chances of making profits on most days, as against booking losses.

•    Adopt a highly disciplined approach of exiting all your positions at the fag end of every market day, irrespective of whether your trade is in a profitable or loss-making position.

•    Do not rush to take any intraday position at the beginning of a market day unless there is some confirmed news about the company whose shares you intend to buy/sell. Gauge the market direction for the first two to three hours of a market day and then try to take a position, giving yourself better chances of success.

Final Word
It is often said that ‘Higher the risk, higher the reward’ and this holds for intraday trading. But, to be successful at day trading, you need to keep your greed under control and invest a minimal sum of money over a higher number of days. The day trading tips shared in this article will enable you to get acquainted with the habits you need to develop while taking intraday positions regularly. The main focus should be on the potential to minimise your losses (when the market is not supportive) and maximise your returns (when the market is good).


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About Pankhudi Dave Freshman   Head Finance Manager

9 connections, 0 recommendations, 46 honor points.
Joined APSense since, July 2nd, 2019, From Mumbai, India.

Created on Apr 13th 2020 05:40. Viewed 232 times.

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