Best Intraday Trading Strategies and Tips

What is Intraday Trading?

Intraday trading refers to the method of buying and selling securities listed on a stock exchange on the same day (single trading session). This form of trading aims to reduce risks and generate financial gains on securities purchases.

 

An investor must possess the best intraday trading strategy in order to realize sufficient returns. This is important because intraday trading involves risks like market volatility, emotional risk, and too much exposure. The top intraday trading tips for beginners help you effectively handle these risks.

 

Best Intraday Trading Strategies

Here are the best intraday strategies you can follow as an investor to reduce risks and increase returns:

 

1. Moving Average Crossover Strategy

A moving average crossover takes place when two distinct moving average lines form a crossover. There is a technical intraday indicator called a moving average crossover that guides you on when to enter and exit. The crossover technique may, at times, fail to get appropriate tops and bottoms because moving averages are a form of a lagging indicator.

 

2. Reversal Trading

Reversal Trading is also called Pull Back Trading involves using matters to bet on the stock against the movement and hoping to make a reversal. In reversal intraday trading strategy, the trader searches for those stocks that reach either very high or very low levels.

 

They are capable of experiencing path reversal relatively often. Every time the movement of the security reverses, a stop is placed and traders wait for the securities to reach the maximum oscillation. A trade is conducted when the reversal value reaches the trader’s assumed boundary.

 

3. Momentum Trading Strategy

Momentum trading leverages the strength of price fluctuations as a foundation for establishing positions. Finding moving stocks that exhibit daily swings is the foundation of intraday trading methods. Approximately 25–35% of equities exhibit volatility. These stocks are located using stock scanners.

 

Best Intraday Trading Tips

Following are the best tips for intraday trading you can follow:

 

1. Choose Liquid Shares (Stocks)

One of the most successful intraday trading tips you must follow is always choosing liquid stocks during intraday trading. It is because these stocks are high in volume therefore they are easy to sell. You also have to ensure that you select two or three big-cap shares that are also as liquid as can be.

 

2. Utilizing Stop Loss

Stop Loss is used to automatically execute the share selling if the price drops to a certain level. You should calculate the stop loss to avoid further losses that may result from a drop in the stock prices. Thus, it's critical that you determine the maximum amount of loss you are willing to accept in the event that the trade deviates from your position. This minimizes your losses and serves as a safety net.

 

3. Book Profit when the Goal is Reached

The adversary of all intraday traders is greed. The reason for this is that the market may quickly change its mind in a matter of minutes, particularly if it is extremely volatile. The secret is to avoid being greedy after achieving that goal. If the stock price has hit your objective, don't hold off on buying more until it does.

 

4. Don't Go Against the Market

Predicting the moves of the market is almost impossible. Remember that the stock price does not increase since the market chooses to disagree. Ultimately, you should avoid being too attached to your analysis. Sell and get out of the market as soon as it reaches your stop-loss level if the market does not back up your analysis. 

 

5. Time is of the Essence

In intraday trading, time is a critical aspect in determining profits. Avoiding taking a position within the first hour of trading is one of the finest intraday trading strategies. This is due to the hour's propensity for significant volatility.

 

This causes a great deal of hurry and bustle during the opening hour of the market, which in turn causes significant price changes. Taking an intraday position between noon and one PM is preferred by several experts.

 

Conclusion

For an investor or trader, Simulators or a free demat account are essential for practicing day trading, they should be able to identify which stocks are suitable for trading in the day. For this reason, people are often unable to make profits due to improper choice of stocks for sale. You can follow the intraday trading strategies and tips to make the most of your intraday investment.