How To Make Money In Intraday Trading: The Ultimate Guide
Do you know how to make money in intraday trading? This article will tell you all the strategies and tips to help you win in the intraday markets.
Traders who are fresh to trading frequently wonder how to make money from/in stock markets. So you're one of the traders who bought some stocks just on someone else's advice and have been waiting for months or years to recoup your investment? According to experts, stock market trading can be pretty risky, but one can act wisely to make some quick money.
One must admit there is an aura surrounding the stock markets, and many people believe that they can make a lot of money by stock trading.
First, innovative traders in stock trading should begin with intraday trading, also known as day trading. To be successful in intraday trading, one must be aware of some simple practical and psychological intraday trading tips that can be learned through experience.
Let us now look at intraday trading and how to make money in intraday trading, as well as some tricks and strategies that intraday traders can use when trading in the Indian stock market.
What is Intraday Trading?
Intraday trading is the purchase and sale of stocks on the same day. It is accomplished through online trading platforms. If a person buys stock in a company, they must mention 'intraday' in the platform's portal. This allows the user to buy and sell the same number of shares of the same company on the same day. The goal is to profit from the movement of market indices.
If you are a long-term investor, the stock market can provide excellent returns.
However, even in the short term, they can assist you in earning profits. Assume a stock begins trading at Rs 500 in the early hours. Within an hour or two, it has risen to Rs. 550. If you bought 1,000 stocks in the morning and sold them at Rs 550, you would have made a tidy Rs 50,000 in just a few hours. This is known as intraday trading.
Day Trading Fundamentals
Day trading is buying and selling a security within such a single trading day. It can happen in any market, but it is most common in the currency and stock markets. Day traders are typically well-educated and well-capitalized.
They employ high leverage levels and short-term investment strategies to profit from small price movements in highly liquid stocks or currencies.
Day traders are acutely aware of issues that trigger short-term market movements. Trading based on news is a popular strategy. Economic statistics, corporate earnings, and interest rates are subject to market preconceptions and psychology. When those goals are not fulfilled or exceeded, markets react with sudden, significant moves, which can significantly benefit day traders.
How Can You Make Money Through Intraday Trading?
Here are some trade-free plan tips for today's intraday trading strategy.
1. Select Liquid Stocks
What if you wanted to sell your stocks, but there were no buyers in the market?
As you may know, intraday trading entails buying and selling a group of shares on the same day before the market closes, i.e., squaring off positions available. However, the market must be sufficiently liquid for the stock market to execute such orders.
The most crucial factor to consider before investing in a stock is liquidity. As a result, the first of today's free intraday tips is to avert small-cap and mid-cap stocks, which may not be liquid enough. Otherwise, there is a good chance that your squaring off order will not be executed, forcing you to accept delivery instead.
Stocks with high liquidity commerce at massive volumes, allowing intraday traders to buy and sell larger quantities quickly.
Furthermore, avoid putting all of your trading capital into a single stock. Experts advise diversifying your intraday roles across a few stocks. Diversification will assist you in balancing your intraday trading strategy and reducing risk.
2. Lock In The Entry And Exit Prices
Have you ever come to regret a decision you made right after it?
Many stock investors and traders are victims of the buyer's fallacy. False beliefs dupe them. This is when the buyer begins to have second thoughts and doubts about their decision. The trader realises that the ’s browsing was not as nice as they thought when entering the trade stance.
To avoid making such trading errors, simply follow the second free intraday tip to determine the entry and exit price before entering a position. This ensures that you have an unbiased viewpoint.
You must be able to plan your entry and exit without allowing your emotions to rule your decisions.
3. Always Establish A Stop-Loss Level
Let us illustrate this with an example.
Assume you're an intraday trader. ABC Ltd is currently trading at Rs. 440 per share, and you anticipate that the share price will rise further today. You decide to invest Rs. 44,000 in 100 shares of ABC Ltd.
However, instead of rising, the price falls to Rs. 400 per share. Within just a few hours, you bear a loss of Rs. 4,000 (Rs. 400 x 100 shares).
When you buy a stock, the share price can go up or down. The proportion you purchase and take a long position in may fall rather than rising on the day you trade.
As a result, you must decide how much risk you are willing to accept if the trade goes against you. This acts as a safety net and helps to reduce your losses. Most experts believe this is the most critical intraday trading tip you'll ever receive. As a result, the third free intraday tip is to study intraday calls (buy and sell recommendations) and set a stop-loss level.
4. When the goal is met, book a profit.
Greed is the enemy of every intraday trader. It only takes a few minutes for the industry to switch sides, especially if it is highly volatile. Why might you ask?
The key to successful intraday trading is the traders' access to high leverage and margins. Profits are boosted by leverage and margins. If the stock price has reached your target, don't wait for it to rise any further. The trick, however, is to avoid becoming greedy once the target has been reached.
Avoid falling into the same trap of believing that the price will continue to rise. You must base your trading decisions on facts and techniques rather than how you think a stock will perform.
5. Always close all open positions.
Today's fifth free intraday tip is to close all open positions permanently. If the stock price target they set at the beginning of the day is not met, many intraday traders choose to take possession of the shares.
This could be a bad strategy. After all, the stocks were purchased for intraday trading based on market trends and technical stock analysis. They might not be suitable for a long term investment.
Consider what would happen if a significant corporation declared bankruptcy after the market closed and the stock opened with a gap down the next day. Investors who hold the stock at the finish of the day may not be able to sell it.
On the other hand, an intraday trader can process company-specific info released a day on the very day. Intraday traders will be able to deal with the impact of information in real-time.
The headlines would not affect intraday traders during aftermarket hours because they may have already measured off their stance. It enables us to eliminate nighttime risk without stifling capital.
6. Do not put the market in jeopardy.
Predicting market movements is nearly impossible. It is not uncommon to find that all indicators point to a bullish market. You can expect your target stock to rise as usual. The market, however, decides to disagree, and the share price does not increase.
7. Conduct research on your target companies.
Today's 7th free intraday tip is to thoroughly research the stocks you intend to trade using professional intraday calls. Begin by comprehending how technical assessment can assist you in making better trading decisions. Do your homework, in other words!
Find out when any company events are planned. These include, among other things, acquisitions, amalgamations, bonus issues, share options, and dividend payments. These events may be just as important as staying up to date on technical levels.
Momentum trading, for example, assists traders in determining how strong a trend is in a specific direction and its ability to persist.
8. TIMING IS ESSENTIAL
The time factor heavily influences profits in intraday trading.Avoiding entering a stance during first hour of trying to trade is among the best intraday trader tips.. This is because volatility is typically high at this hour. This causes a rush and a lot of noise in the first market hour, which leads to substantial price fluctuations. Many experts prefer to trade intraday between midday and 1 pm.
To summarise, learning how to make the right move at the right time is essential for making the most of intraday trading. The best way to master this skill is to pay attention to details and try to understand the market's mood in the morning, noon, and close to closing.
Intraday Trading Dos and Don'ts
Do's of Intraday Trading
1. Begin with paper trading before moving on to real-money trading. You can move on to actual trading when you start making money with paper trading.
2. You can make a nice profit from intraday trading, but you must stick to your strategy precisely as it is.
3. The essential aspect of intraday trading is greed and fear. As a result, you must exert control over it.
4. Keep your Greed and Fear at bay.
5. Always divide your intraday capital into at least four sections.
6. Construct your research.
7. In intraday trading, technical indicators are widely used.
8. For intraday trading, use a software-based trading platform. Because it is quick and straightforward to use. intraday trading dos and don'ts
9. Minimum intraday brokerage is very important if you are an intraday trader.
10. Always start trading in very liquid stocks, i.e. stocks with a high volume, because entry and exit can be rapid in such stocks.
12. A stop loss is essential for intraday trading.
Don'ts in Intraday Trading
1. The essential aspect of intraday trading is to avoid believing in NEWS and RUMORS.
2. Avoid over-trading. Stick to your plan.
3. Do not barter if you are unsure.
4. Don't expect to make money on every trade.
5. Avoid trading with Extra Margin.
6. In intraday trading, do not trade futures or options.
7.'Rumors' can ruin you probably eventually, so don't believe them.
8. Three four-letter words that will kill you! HOPE–WISH–FEAR–PRAY
9. Never trade with your ego.
10. Never fall in love with a stock (Just Flirt).
11. Never trade without a stop loss.
Bonus - Technical Analysis Books That You Must Read!
Technical Analysis Explained by Martin Pring
Technical Analysis of the Financial Markets by John Murphy
How to Make Money in Stocks by William O’Neil
Japanese Candlestick Charting Techniques by Steve Nison
Encyclopedia of Chart Patterns by Thomas Bulkowski
Technical Analysis Using Multiple Timeframes by Brian Shannon
The key to becoming a successful swing trades trader is in your personality how you manage your emotions and stick to your investment strategies while making tactical adjustments as needed.
You can even consider becoming a full-time day trader once you've mastered your trade play.
What exactly is intraday trading?
Day trading is a type of securities speculation in which a trader buys and sells a financial instrument on the same ability to trade day so that all roles are closed before the auction ends for the day to avoid uncontrollable risks and negative price gaps among one day's close and the price at the open the next day.
How do I profit from intraday trading?
Best Intraday Trading Strategies for Easily Earning 5000
Choose Liquid Shares.
Always use a stop-loss order.
Profits from Books
Determine the entry and exit points.
Avoid going against the grain.
Investigate Your Wishlist.
How can I make $1,000 per day trading intraday?
After understanding and implementing these seven steps, you can begin earning Rs 1000 per day from the stock market.
Step 1: Create a Trading Account and Transfer Funds.
Step 2: Select Trending Stocks from Finance Websites/Apps.
Step 3: Choose three 'trending' stocks to trade.
Step 4: Examine the Price Charts of Selected Stocks.
Step 5 – Form an Opinion About the Stock You Want to Trade
Step 6 – Determine the Correct Entry/Exit Level and Place the Trade
Step 7 – When You Have Gained Confidence, Place
When is the best time to trade intraday?
Many experts believe that the best time to trade intraday is between 10.15 AM and 2.30 PM. Morning volatility typically subsides by 10.00 to 10.15 AM, making it an ideal time to place intraday trades.
How much can intraday traders earn?
It can go up to Rs 1 lakh per month or even more if you are skilled enough and have a plan in place. Does this imply that all intraday traders are profitable? No, not at all. According to some studies, 95 per cent of Indian traders lose money in the markets.
What is the highest intraday trading margin?
To trade in the cash segment of the market, you must pay a 20 per cent upfront margin of the transaction value.
Is intraday profitable over delivery?
Brokerage on intraday trades is always lower than on delivery trades. Short selling of shares is possible, which means that the shares can be sold before they are purchased, allowing for profits even though the price of securities is sure to fall.