There was a time when only the names of big financial institutions, brokerages, and trading houses were heard among those actively trading in the stock market. But today, as online trading and discount brokerage have grown, the common man has also reached to trade actively in the stock market, which is really beneficial and intraday trading in the stock market Talking about it, it can really be a tremendous career for such people who like to walk in challenging conditions and who also enjoy taking risks. So what is it about intraday trading that is full of risks and challenges? And it is heard that the profits of being a smart intraday trader are also great, so in such a situation it is necessary to know that is it intraday trading. What are its advantages and what are its disadvantages?
So let’s start and know about intraday trading. Intraday trading means buying and selling stocks on the same day. It is also called debt trading and its purpose is to earn profit through the movement of market indices. Intraday trading is not done for investment purposes but for some profit purposes and this trading can be done in almost all types of stocks. Suppose a stock is 500 in the morning and then in an hour or two it becomes 550. In such a situation, if you had bought a thousand stocks in the morning, then you can sell at 550 when the same day price increases, and by doing this you will get a profit of 50,000 in a few hours, then this is called intraday trading.
Let us now know about intraday trading indicators. First of all, let’s talk about the moving average. This means that most of the traders depend on the daily moving average i.e. DN of the stocks. This moving average is a line on the charts, which shows the behavior of a stock over a period of time and these charts show the opening and closing rates of the stock. So through this minimum average line, intraday traders get an idea of the average closing rate of a particular stock and also the up and down of the price, so that they can make the right decision for their stocks in a limited time.
Now let’s know about Bollinger Bands. These bands have three lines, which are the moving average, upper limit, and lower limit. When the trading range of a particular stock is observed, it becomes easier to locate price variations and take sorting actions. And now let’s further understand the momentum oscillator. When an intraday trader wants to know whether the price of a stock will increase or decrease, the Momentum Oscillator will help him. It occurs in a range of 100 and indicates whether the stock will go up or down. With its help, the trader is able to decide when to buy a particular stock.
Let us know further that Relative Strength Index i.e. RSI is a big killer timing. The index is the form of trading of stocks. This RSI which ranges from 100 and graphically shows when a stock will be bought and sold at the highest price. So, friends, these indicators can be called special friends of an intraday trader because they keep giving him moment-by-moment information about profit and loss so that he can make a profit and avoid loss. This means that it is really important to understand all these indicators to become a successful intraday trader. Only then he will be able to help you like a friend.
Now after the indicators, let us also know what qualities are necessary to become a successful intraday trader and what strategies we must have knowledge of. So first of all, knowledge and experience of the marketplace, that is, a trader should have a good understanding of the marketplace and this sense develops with experience because, on the basis of this, profit can be made in the stock market. Otherwise, there are more chances of incurring huge losses. Therefore, technical analysis and chart trading skills should be developed and instead of taking high risks in the beginning, one should gradually understand the market and invest more money in trading.
Now let’s talk about Enough Capital. A trader should have so much money that he uses only his risk capital in trading and does not suffer huge losses in case of loss. Because the stock market and trading in it also means huge loss at one time and huge profit at the same time. That’s why it is necessary to have sufficient money along with knowledge. And if we talk about discipline, then without discipline, a trader’s day cannot be good. And it can also be said that if he does not have discipline then he would not be able to match his criteria within a day. Will come and return. So even though being a debt trader may seem like an aggressive and hectic role, it is actually a role of discipline, so that each day’s target can be met on the same day and profit can be made.
And let’s know about the right strategy. Day traders have many strategies, based on which they are able to reduce losses and increase profits. Scalp is one such strategy. Through this strategy, traders make many small profits in a day, which come from small price ranges. Range trading This is a strategy using which traders identify a range to buy and sell stocks in the short term. High frequency trading i.e. HFT. This complex algorithm is a type of financial trading, which is used to transact a large number of orders in a very short time i.e. even in a fraction of a second.
News-Based Trading – In this trading strategy, traders look for events from multiple news sources that can update the stock price movement and make profits. According to many reliable news sources, the company is about to announce its intention to acquire a company. Such news increases the volatility in the stock market, which benefits the deal trader. You too can become a trader by using these strategies and qualities to buy and sell the right stocks at the right time. And since you are interested in day trading, you would want to know how to use stocks for intraday trading. So the most important and first step in intraday trading is to choose the stocks. Because if you pick the right stocks, you will get good returns and if you pick the wrong stocks, then losses are bound to happen. So you don’t make a loss but make a profit.
To get the maximum, you should take care of all these things while choosing stocks. For example, high-volume freight should be selected. That is, it is highly liquid and has shares of penny stocks and small-scale companies, whose price is as low as ₹ 20 a share. A maximum of two or three stocks should be selected at a time as it becomes difficult to monitor more stocks simultaneously. Deciding the price at which you as a trader want to buy or sell stocks should clear your entry and target price. You should also decide on a stop-loss order so that your risk can be reduced. There is an advance order to sell the shares, in which the share price is sold as soon as it reaches a particular price point. After placing the order, you should monitor and exit as soon as the price hits your target or stop loss levels.
Let us tell you that the entry-level is related to the purchase price, then the target price is the estimate of the future price of the stock from the exit point selling price. Also, you should avoid volatile stocks. That is, instead of putting money on those stocks that seem stable, track the stock behavior. Stable stocks should be found and chosen only. You should always select your trade according to the market trends because what is in trend usually brings profit and this is the most basic. But the most important step is that stock trading should be started only on the basis of proper research.
Now if we look at the advantages of intraday trading, you need a much less principal amount in comparison to investment. That is, in the Indian stock market, you can start with a small amount as low as five thousand, then even with a large amount like 2 lakhs, you will have to wait longer for profit, Let us tell you that the entry-level is related to the purchase price, So the target price is an estimate of the future price of the stock from the exit point selling price. Also, you should avoid volatile stocks. That is, instead of putting money on those stocks that seem stable, track the stock behavior. Stable stocks should be found and chosen only. You should always select your trade according to the market trends because what is in trend usually brings profit and this is the most basic. But the most important step is that stock trading should be started only on the basis of proper research.
Now if we look at the advantages of intraday trading, you need a much less principal amount in comparison to investment. That is, in the Indian stock market, you can start with a small amount of Rs 5,000, then even with a big amount like Rs 2 lakh, you may become overconfident after getting a little profit, waiting for a longer time for profit and after that when If losses start occurring, there is a risk of being psychologically affected, which can have a negative impact on health. If you start ignoring the trading diary and trading plan after being successful as an intraday trader for some time, it will become very difficult to be successful.
However, shortcuts will not suffice, so you will have to understand the structures and charts and trade while loading. This requires extreme focus, attention to every detail, and mental strength. This is not a part-time job, because in this work you will have to remain sitting at your desk from 9 am to 3:00 pm, timing the stock market for an entire day. That’s why both full-time commitment and discipline are required. So it means that you will have to take entry in day trading. That too with complete preparation.
So now let us also know what is necessary to start trading. For this, you will need a trading account and you will have to maintain a sufficient margin balance in it. After that, you can start trading. I know all this much, But still, you may have a confusion because often there is confusion between intraday trading and delivery trading and they also relate to each other to some extent. That’s why it will be beneficial to understand the differences and relationships between them. So see, if the stock is bought on a delivery basis, it can be kept with you for any period of time and if desired, it can also be sold on the next day. It is completely up to the trader as to how he wants to trade his stocks. Whenever he feels that the market is high, he can earn a profit by selling the stocks. In intraday trading, it is necessary to sell the stocks on the same day, that too before the market closes.
And if the day trader is unable to do this, then he can have two outcomes. First, some online platforms automatically convert those stocks into delivered trades and charge brokerage for the same. By doing this, the day trader can sell them whenever he wants and the second is less that your stocks should be closed at the market price at the close time. Even if the price is very low you have to bear the loss. So this is the difference between these two trading. This is really important. It is good that you came to know about them too. Moreover, he has come to know everything about day trading, with the help of which you can become a trader. Now ahead of this, you have to become a successful trader on the basis of your knowledge, research, learning, and discipline and for this, you have to remember one more thing, which is patience. Avoid investing your savings anywhere by being over-excited and take advantage of debt trading thoughtfully.