Do you want to earn money by investing money everyday, then trading can be a better way for you where people earn a lot of money by trading just 2 to 3 hours, hope you will know about intraday trading but if you do not know and If you want to know about it and want to earn money from here, then definitely read this article till the end because in this we have tried to give information related to intraday trading which will help you to enter this market and earn money.
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What is intraday trading?
Trading is the activity of buying and selling any type of asset in order to earn profit. When a trader buys any asset for a day and sells the asset before the market closes to make a profit, this type of trading is called intraday trading.
How to earn money from intraday trading?
- Measure your risk: This is a basic rule that you should follow in intraday trading. Determine the extent of the losses you are willing to take. Ask yourself: How much are you willing to lose in one trade?
- Always be on the side of speed: When you trade intraday, don’t think like a contrarian long-term investor. Measure whether the stock is moving up or down and trade accordingly. It is important to go with the flow of momentum in intraday trading.
- Technical Chart: Of course, you can make many intraday trading decisions with technical charts. As an intraday trader, you need to develop the ability to read some basic technical charts on your own.
- Play both ways: If you want to make money in intraday trading, then you have to be ready to trade both ways in the market. When you are going to close intraday trades, it does not matter whether you buy first or sell first.
- Maintain a Trading Diary: A trading diary is the secret weapon of every successful intraday trader. It is not only a record of your trades and logic of trades, but also the learning process.
Keep these things in mind while doing intraday trading
Whenever you invest in intraday trading, always keep the following points in mind;
Enter and exit the market at the right time
Before starting a trade on any stock, first try to know how the stock price is trending. If you know the price trend, you can easily take entry and exit of the trade. For example, you can leave a trade by booking a profit or booking a loss.
Always make a stop loss
Stop loss is a part of your exit strategy. By creating a stop loss you are minimizing the potential loss. If your expected profit is hit then you can create another stop loss.
Never trade penny stocks
Penny stocks give high returns. But they are most volatile. Stock operators always dump their money stocks in high value and the general public buys those shares and incur a loss.
Helpful indicator for intraday trading
Trends and indicators help the trader to know the market conditions. Now we will try to learn some of the famous indicators.
- Moving Average- We all know what an average is. Moving average is also similar but gives a little more information about 1 stock. It helps in knowing the short term fluctuations in the price of the stock. Moving averages are used to measure the volatility of a stock price over a period of time.
- Bollinger Bands – This is a very essential tool for the trader who can adjust the standard deviation over time. Helps to know. This indicator consists of 3 lines, first is moving average, second is upper limit and third is lower limit.
- Momentum Oscillators – Stock prices are very volatile. This indicator helps the trader to know whether the stock price will rise or fall in a given period of time.
- Relative Strength Index (RSI) – RSI Trader It helps to determine the extent to which the price of a stock can change within a given period of time.
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How to choose stocks for intraday trading?
Before you start trading you should learn how to choose the stock you will trade. We are giving a guide below. Always check whether the following items are in stock or not.
Always choose highly liquid stocks to trade. You should choose stocks of small and mid cap companies. They are highly liquid. If you choose a stock which is not liquid then you will not be able to book profit within a day.
Before buying, check how volatile the stock is. Stocks with moderate volatility are perfect for trading purpose. High volatility also comes with high risk. Try to choose a stock that is slightly volatile but does not exceed 2%.
The trade volume of the stock you are picking up should be very high. Higher trading volume means higher demand or higher supply, higher volume comes with volatility where you will make the best profit.
What are the benefits of intraday trading?
- Intraday is risk free if you do not leverage your position. With less principal comes less risk. But the percentage change in price will give you substantial profit.
- The brokerage fees for intraday trades are so low that it doesn’t matter when you compare it with the returns you earn.
- Intraday trades give a lot of profit. Intraday trades give you returns on a daily basis which means you are making profit for every movement in the stock price.
- You make profit in both bullish or bearish market. Bullish market gives you direct profit. In a bearish market, you can short the shares and make profit even in the falling price of the stock.
Where can you learn intraday trading?
We are giving you some of the best youtube channels to know about intraday trading. Please watch all the videos that this channel uploads. By watching all the videos you will not only get an idea of how share market works but also how you can become a successful intraday trader.
- do anointing- https://www.youtube.com/c/AbhishekKar
- Pranjal Kamra- https://www.youtube.com/c/pranjalkamra
- CA Rachna Ranade- https://www.youtube.com/c/rachanaphadke
- Malkan View- https://www.youtube.com/c/Malkansview1
Conclusion
Many people have very high expectations before coming to this market, which is absolutely wrong, although you can definitely earn money from here, but before that you have to learn well or else the risk of losing money here is much higher than that.
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