Intraday Trading
Intraday Trading

Basics of Intraday Trading

As per the general rule of the stock market, a trader can purchase and sell the shares easily from the secondary market. There’s no time limit of buying and selling and traders can do transactions anytime to make maximum profits.

Intraday trading is all about opening and closing out the position on the same day. Intraday trading can be buying in the morning and selling it the same day or vice versa.

Intraday trading indicators combine volumes and prices to get a reliable source of information on the likely direction of the stock price. Normally, price is an indicator while volumes provide the confirmation to a trend.

Once the trader has been identified as an intraday trade, they are entitled to higher leverage. For example, with a margin of Rs.10,000 you can take open positions to the extent of Rs.80,000, which is defined as 12.5% margin or 8 times leverage.

When you trade intraday, you are trading on a very limited trading window of around 5 hours. Normally the first half hour and the last hour are too volatile and hence you you need to be careful while trading during this time round.

The first step in intraday trading is identifying the stocks to trade. Focus on stocks that are not too volatile. The second step is to determine the levels of entry and exit.

As per the general rule of the stock market, a trader can purchase and sell the shares easily from the secondary market. There’s no time limit of buying and selling and traders can do transactions anytime to make maximum profits. However, when it comes to intraday trading, the traders are required to buy and sell the shares on the same day. This trading is required to be done within the opening and closing position of the share market on the same day.

In more simple terms, if you buy shares in the morning and sell it in the evening, then this trading is known as intraday trading. Though this trading is quite risky because of market volatility, one can earn excessive profits if he/she knows the market conditions and stay alert in every passing second. Intraday trading doesn’t impact Demat account as there’s no share delivery & net position remain zero at the end of the day.

Top Technical Indicators for Intraday Trading

Moving Averages

While dealing in the stock market, you have surely gone through trading indicator- Moving Averages. Ut what this term means? This indicator is a line put on the stock chart. Over a specified period, it connects average closing rates in the market. The reliability of these averages gets enhanced with a longer period. It effectively comprehends the instant movement of prices.

All in all, moving averages help in smoothening the volatility of stock prices to entail the understanding of price movements and trend prevailing in the market. So, the upside and downside can be gauged easily by these indicators. As you are going to do intraday trading so it becomes essential to remain active & updated with moving averages.

Bollinger Bands

One step ahead to moving averages, Bolliger bands not just give moving averages detail but also acquaint with an upper and lower limit. Just as the standard deviation, it represents the prices that increase or decrease from the level of averages. It carries the mean values.

Volatility is quite important for traders because it manifests the extent of risk that can arise in the market. On this risk, the whole trading depends and it gives access to higher profits also. It sets the range for intraday traders to help them trade within that range and earn profits accordingly.

Oscillators

Who doesn’t want to make the best in the stock market? Everyone desires to do so and by resorting to oscillators, you can surely do so easily. These are completely unrelated to bearish or bullish market trends. So, it becomes quite convenient for the intraday traders to check probability & trade in the market.

It helps the traders in visualizing market sentiments which in turn help them to position themselves safely and advantageously. It cycles both the directions and helps understanding market sentiments and their modifications. It captures build-up and loss of momentum that helps the intraday trader in designing a trading strategy.