Intraday trading is a type of trading. The buying and selling of a stock is completed on the same day. That is, it is called intraday trading because it ends in the same trading session.
What is Intraday Trading?
Here, trading is not done with the intention of holding or imposing a position for the next day or weeks. The main purpose of intraday trading is to make a quick profit and get out of your position quickly.
Also, the holding time of the property can vary from a few minutes to a few hours. In addition, intraday trading is done for high beta stocks. I.e., stocks with high fluctuations in their price on a daily basis. Some people do options trading as well, here is a complete course about options trading in tamil.
If prices do not move throughout the day, there will be no chance for intraday traders to make money from that trade.
Who are the intraday traders?
There is a proven theory in the market- “The more time you spend in the market, the more productive it will be”. Intraday trading is usually done by traders who are very active in the market.
That is, they keep an eye on the market with every passing second. One thing to keep in mind while doing intraday trading is that one should not get too greedy while taking intraday trades.
If we have serious profit targets and stop-loss levels, it will go a long way in choosing the right trades for intraday trading. The stock price is an advance to sell the shares if it reaches a certain price point.
Therefore, it helps to automate the sales process in different market scenarios. Also read about the myths in stock market.
For example, suppose I do intraday trading for shares of Reliance Industries Limited (RIL). The current price per share is Rs. 2200. Therefore, if I buy a stake in CMP and have a target price of 2225 and a stop loss of 2185, as a rule we should stick to those positions, but not increase our profit targets or pursue our stop losses
Important Rules to Follow in Beginner Intraday Trading:
Here are some important rules to follow when trading intraday to maximize profits and minimize losses:
- Always opt for liquid stocks for easy-to-enter or exit intraday trading.
- Keep in mind the entry and exit points before entering the trade.
- There should always be a stop loss for trades because that position can go away and huge losses can occur.
- It is important to have a clear trading mindset when doing intraday trading.
- One must be willing to take multiple trades in the same companies or indices as the market can offer multiple trading opportunities.
- Always take trades in the direction of the market. Remember “trend is your friend”.
- Average reverse trades are generally not a good strategy for intraday trading.
In this article, we will discuss the proper steps to start Intraday Trading for Beginners in India.
Finally you can find out here about the extra things you need to know about it.
- Intraday trade is on the rise in India. With the growing education in business and investment, this trend is likely to grow rapidly in the future.
- When trading intraday, buying and selling of shares should be completed within a day.
- Intraday trading is also possible in the cash and derivatives markets.
- It is advisable to always have proper risk management (stop loss and target) for all trades
- For a long and productive life, it is always advisable to have proper business rules and discipline.