Intraday Trading Tips & Strategies

A Beginner's Guide to Intraday Trading

Intraday trading or day trading is the process of purchasing and selling a stock within a single day. The process is quite common in foreign exchange and stock markets. In day trading, various trading strategies are used to capitalize on small price movements in high-liquid stocks and currencies. However, day trading involves significant risks and it requires a thorough understanding of how the market works. This article will take you through the basics of intraday trading, its benefits, few useful strategies, and a few vital tools that can smoothen the research process.

Intraday trading, also known as the Day trading, is the process of buying and selling of stocks on the same day. You have to square off your positions on the same day in intraday trading and the net position at the end of the day has to be zero. Whether you earn a profit or incur losses, the amount is credited or debited from your trading account on the same day. The sole purpose of intraday trading is to make huge profits by leveraging the volatile fluctuations in the prices of stocks. Read on to understand the fundamentals of intraday trading.

For investing in the stock market, it is mandatory to have a Demat account. Hence, the first step to begin intraday trading is opening a Demat account. You can also open a separate Demat or trading account exclusively for intraday trading. You can also get access to the right set of tools which can be quite beneficial for intraday trading. These tools provide thorough technical analysis which can help you in devising your intraday trading strategy.

Here are some unique benefits of intraday stock trading:

  • Intraday trading can be quite lucrative, if you plan your move tactically, you can make handsome profits by utilizing daily movements.
  • It also provides ample of opportunities for you to learn about stocks, test and apply different techniques to earn profits.
  • Intraday trading also decreases the brokerage commission. The brokerage charges are almost 1/10th during intraday trading, you can do a lot of trade by paying commission, which is not possible in long term trading.
  • The key benefit of intraday trading is that your position is closed at the end of the day, which means that the profitability will not depend on what happens during the non-trading hours. Any unpredicted event cannot affect your income for the day.

Intraday trading is a highly risky task as compared to stock trading. Therefore, formulating strategies is the key to succeed and make good profits. Very often, people end up incurring losses because they do not select the right stocks. Make a full-fledged intraday trading plan and stick to it. It is imperative to select the right stocks for intraday trading that have sufficient liquidity. Liquid stocks tend to have high trading volumes, hence, larger quantities can be purchased and sold without hampering the price. Remember that choosing the right stocks that can give you the movement is a crucial step to becoming proficient in intraday trading. You can read more about the best intraday strategies to follow to succeed.

Doing thorough research before starting intraday trading is crucial. Intraday charts can be quite useful, the charts depict the fluctuation of prices throughout the day. When formulating an important strategy, there are a few intraday trading tools that would be very useful in amplifying the returns. You can also use the Beyond App by Nirmal Bang which provides you with proper technical analysis and reports whenever you need it on the go. You can also follow the continuous stock analysis on news channels and social media channels of Nirmal Bang to get further clarity.