Intraday traders, whether new or experienced, go through volatility in this journey. As you make complete transactions in a single day, you might be prone to higher risks. However, being an intraday trader, you can also generate higher returns when holding the right knowledge and strategy. To ensure that you start with a clear understanding, this article will provide you with certain intraday trading strategies and tips.
Intraday Trading: 5 Must-Follow Strategies And Tips
Some of the most effective intraday trading strategies that traders should be aware of include the following:
- Select liquid stocks
Intraday trading includes the purchasing and selling of stocks on the same day. This practice needs ample liquidity in the market. Thus, a crucial reminder that you must follow is trading in large-cap stocks instead of mid or small-cap stocks. Additionally, you must also prevent intraday trading app with a particular stock and look to diversify your position across multiple stocks. This diversification allows you to achieve a balanced trading along with reducing risk.
- Freezing the entry and exit price
When performing intraday trading, multiple traders fall for the fallacy of the buyer, because of which they immediately question their selection after purchasing a stock. The buyers start believing that they have not made the right choice, and with such anxieties, they end up making wrong and hasty decisions. However, traders can prevent this fallacy by selecting an entry and exit price before starting the transaction. Such pre-decided prices let traders remain objective and avoid unnecessary doubt about their decisions.
- Decide on a stop loss level
In intraday trading, the stock you select might fall rather than rise. Under such situations, the question is how low you must allow the price to fall before selling the stock. Selecting a price you prefer as a stop loss level is important to consider. This online trading strategy helps reduce your losses and create a safety net.
- Book of profit when meeting the target
The margins and leverage provided by intraday trading are what make this journey attractive for the traders. Under this trading, you hold the potential to generate high returns. However, it is important to remember that you must exit the transaction when booking a profit and not get greedy. Unless you hold a specific reason to believe that the stock price might rise, it is advised to exit after meeting your target.
- Avoid challenging the market
Predicting the stock market is a complicated task. You might often make decisions for intraday trading that you wish to adapt on the basis of market analysis. However, when starting trading, the market might move towards the opposite direction. You must refrain from challenging the market, and it is advised to sell your stock when it reaches the stop loss level.
Conclusion:
When performing intraday mobile trading, traders may profit from short-term price movements; however, it requires the right tips and strategies with risk management and precise execution. Remember, a successful intraday trading includes staying focused, learning continuously from ups and downs, and being prepared for market volatility.
