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  • What parameters to consider while Intraday Stock Trading?

    Willing to try your hands in Intraday Stock Trading but don't know how to deal? Read guidelines from here before trading in this.

    If we want to do Intraday Stock trading, what parameter to consider while this, as we are buying stock and sell on same day. This involves risk as we don't know how market behaves. It may increase stock price or may fall it. If we buy stock and keep in Demat account for long term, it might give profit. But If we want to do day trading, how to determine whether particular company stock will rise or fall?
    How successful traders do this and judge the market for day trading and earning good money?
    How someone can determine day price movement, even company declares it financial reports at some interval like half yearly?
  • Answers

    7 Answers found.
  • Intraday trading is a kind of trapping of the investors for some particular stocks with the hope of making some quick money. But to me, it is the most riskier part of the stock trading. The interesting feature of such negotiations lies in raking unimaginable profits say within a couple of minutes but the effect might be the opposite with the heavy losses otherwise.
    We are guided with Fear, Greed and Aggression in the process of Intraday Trading. Such operations would provide both heavy losses or amazing profits.
    Intraday Trading is a working pattern where the transactions are to be carried out on the same day. Here we are receiving benefits of both trends - buying and selling. If the price of the stock is bearish, we can sell it at a higher level and can buy them at a lower level known as short sell.
    The following aspects are to be understood in this context-
    1) Understand the market behaviour.
    2) Select Trading Strategy.
    3) Evaluate the individual risk appetite.
    4) Identify the risk taking behaviour.
    5) We should be familiar with the Economic, Industrial and International market situations.
    The prices of shares would depend upon some factors like fundamentals including Profit or Loss, Its quarterly results, Balance - sheets and other factors affecting directly or indirectly the performance of the companies.
    The Technical Analysis is to be evaluated so as to find out both supporting and resistance level of the stocks in order to garner handsome profits.

  • The intraday traders will have a focus on the following;

    1. Define Manageable risk: In intraday trading managing risk is very imprtant. Define the risk you can take. Cap the maximum and minimum risk you can take. You should have a set limit for a reduction in the capital in a day, in a week and in a month and under no condition you should not deviate from this. Stay out of trading if you are not able to get grip on the situation. Fix the maximum loss you can withstand.
    2. Learn from the mistakes committed: There are chances we may do some mistakes while trading. But don't repeat the same mistake. Wait while for a while and see the reasons for the losses. Try to understand the core reason and get corrected it. Never do the same mistake again.
    3. Operate the trading with a plan. Make a plan and execute the same.
    4. Study the behaviour of the traders recently. What is the recent high and what is the recent low and what is the position today? Take note of all these factors and then decide on the shares you want to trade.
    5. Don't go for some many shares. Limit companies.
    6. Don't get panic and plan the strategy based on the ground realities.
    7. Don't be greedy. When you have fixed a target and you got the profits as fixed, don't change your targets and don't go for further trading.

    always confident

  • Intraday trading is not the everyone's cup of tea. It is done by those market players who have an experience in this arena and are well aware of the market moods and their movements in certain conditions. It is like a psychologist who knows how the mood of a person would change with circumstances and situations in life. So, the expert intraday market players can predict the mood of the market during the various hours of the trading time. They are in continuous touch with the news channels giving the political and financial conditions of the country and based on the data they take calculated risks. Many things help them in taking a good decision like announcement of some new policy or some routine seasonal policies by the RBI during the day. Foreign relations, world trade, sentiments in foreign markets and local perturbing factors all are taken in consideration by them in going for intraday buy/sell decisions. For example if at 1100 hours IST some foreign country announces to ban some imported items from India the intraday broker would unload some related shares from his kitty to take advantage to again buy them after 3-4 days when they go down due to the dissemination of this news in public. So, essentially the intraday trader is well aware of what is happening in India as well as world in respect of political and financial matters.

    Intraday traders not only consider the trends of a scrip but also see its inherent strength so that if due to some reasons the scrips are held with them before offloading them for a profit then they can keep them for the long term growths. So most of the intraday traders would like to trade in the so called blue chip companies where inherent risk of losing in long term is minimal. Please note that an intraday trader has to earn within the same day so he would like to avail all sort of options and hedging the loses to the minimal extent and try to limit his risks with options and futures by paying the upfront margins. It is imperative that the trader should have a clear understanding of these processes in the share market environment.

    Another interesting thing about such investors is that they would be perfect in settling deals simultaneously within a short span. For example if an intraday trader finds that a share is available for Rs 340 in the market and he finds that a particular broker wants to buy it for Rs 342 to give an already maturing delivery then the investor would settle both the deals almost simultaneously to make a cool Rs 2 on only one share. At the same time a lazy investor would not be able to do it as by the time he turns back to the Rs 340 offer it would have changed to Rs 345 at which price it is not a viable deal. So I have given one simple example to show the swiftness with which a intraday trader has to function. There are much more complex situations then that.

    The contracts in intraday trade survive on quick decisions and prompt responses. Only such people who have that type of potential to act in the market can really be benefited by it. One thing which is very important in this matter is one has to take positions as per one's capacity and if one falls in the grab of greediness then sometimes big losses might had to be suffered by the investor. One in hand is better than two in the bush.

    Knowledge is power.

  • The intraday stock trading is basically buying a number of stocks and selling it on the same day. There is a very high risk doing intraday stock trading but there are high returns as well if you have proper strategies of entry and exit rules. The stop loss is the main strategy one should follow while trading. This is very useful in reducing your losses. Using this strategy your stock gets sold if it reaches a level below your loss will be higher.

    Below are the tips that you can follow doing intraday trading.
    1. Choose the right stock which has a good profit history. Always choose shares that have high liquidity.
    2. Have proper strategies
    3. Always set a stop loss level to reduce the losses, there should have a proper risk management
    4. Freeze the entry and exit stock prices
    5. Always book profit whenever the target is reached
    6. Do not ever challenge the market
    7. Be updated on the share market rates, spend time to analyze
    8. Do not give prime focus only on money, always focus on the right strategies which will help you get profits by mitigating the risk.
    9. Always limit trading the stocks. Do not trade many stocks at the same time. Spend time every day to understand the price movements. So, focus on only a few stocks.
    10. Use technical charts for the best practices, this is based on the minutes or hours to know how the stock moves.
    11. Control your emotion which may lead you to make bad decisions, decisions should always be based on logic.
    12. Do not ever trad based on the rumors, there should always be based on a proper research and facts.
    13. Keep building up the learning habit about the share market strategies.

    I would like to suggest you to visit below links that will definitely help you get more ideas and suggestions from the experts.

  • What parameters to consider while Intraday Stock Trading?

    Now before we go into the parameters for intraday trading one must have the basic knowledge of intraday trading.
    What is intraday trading?
    In an intraday trading a trader takes a position of either stocks or indices or futures or commodities for a very short period of time depending upon the time frame one chooses and covers the position within the same day and not carry the position for another day irrespective of profit or loss.
    In intraday trading one can go either long or short, long means buying at a lower rate and then selling at a higher rate, short means first you are selling a stock at a higher rate and then buying it at a lower rate.
    Is the trader novice or experienced in trading?
    How much knowledge a trader has in the technical indicators such as support levels, pivots, resistance levels, etc before they take an intraday trade. A trader should be able to analyze a situation where to book a profit or where to exit with a loss by placing a stop-loss order.
    How many years of experience the trader has?
    Intraday trading requires quite an amount of experience about stocks, price action, and its movements.
    Is the trader well versed in online trading?
    In intraday trading each individual trader has their own strategies that they know through their own experience and knowledge skills, money management techniques, and risk-reward ratio. One should be able to know the previous day's close, candlestick patterns, moving averages, and other technical indicators
    It is always better to start with paper trading and gradually get accustomed to it and make consistent profits before making an actual trade. Intraday trading can be done in cash, futures, or in commodities. One needs to know when to book profit or how much they are able to take a loss. Each day is different. If the trader is comfortable with trading and has the above basic knowledge one can consider intraday trading.
    For intraday stock trading the below parameters are to be considered
    Intraday trading is not as easy as it seems.
    For any trade one must not forget to place a stop-loss order which one should be able to bear without losing one's hard-earned money by having a big drawdown.
    The trend is the friend: Always trade with the trend
    If the market is bullish select a bullish stock with volumes and trade long.
    If the trend is down select a bearish stock and trade short.
    Timing is also important and price action is not always linear there are always whipsaws and on should be able to judge the movement of the stock and trade.
    Usually for long trades one buys at support and sells at resistance and for short trades sells at resistance and buys at supports.
    Selection of a time frame and time of the day is very important some may trade for 15 minutes, 30 minutes, one hour or two hours depending on their experience and skills, capitalization, money management, etc. and stick to it irrespective of the outcome.
    Studying the chart movements days support levels, pivot, resistance levels, moving averages, close of the previous day, open, high, low, average and volumes, the trend of the day, stochastic, MACD, RSI indicators will help to choose and pick the right stock to trade.
    It is always better to select a liquid stock for intraday trading.
    All trades cannot be winners so stop is a must.
    Before entering a trade one must have an idea of where to place a stop-loss order.

  • Intraday Stock Trading is all about initiating and closing the trades on the particular stock trading day i.e. if anyone buys 100 shares of CIPLA Limited in the morning at INR 250 and sells it in the afternoon at INR 258 then you can book margin of INR 800 intraday. The number of shares must be limited and set the limits of entry and exit price to avoid loss. We can sell the stock in morning and buy it back in the evening. This trading does not affect any delivery as the net position on the closing of the day will be zero.

  • For intraday stock selection you can follow below steps;
    1) Always compare stocks with nifty or its relevant index performance.
    2) Selected stock should have out performed the index.
    3) Clearly mark the stop loss and the target based on the swing highs and the moving average or price action strategy.
    4) Prefer stocks from large caps which has high liquidity. It helps in executing the trades quickly.
    5) Don't go against the trend of the market.
    6) Most big traders take and close their trades before 10.00 am, you should have speed with clear decision making abilities.
    7) There are many other indicators which can be used to define the trend the particular stock.
    8) Emotions plays big role in trading, don't hold onto a trade if it goes against you. Don't regret if your SL gets his, instead analyze that trade and improve your strategy

    Strategy comes with experience. And for experience you should execute trades.

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