Intraday trading means closing your trading position on the same day. You can buy stock in the morning and sell it before the end of the day. Or you can sell it in the morning and buy the stock again before the end of the day. In fact, daily trading is one platform where you can actually sell stocks without having to ship them to your Demat account.
Intraday traders are squared on the same day and therefore have no effect on Demat accounts. You can define order as a margin for an Intraday Square-off (MIS) order, and depending on the volatility of the stock, you can get the trading day limit up to 5-10 times the trading day. That sounds great, but why would 70% of daily traders eventually lose money? The reason is that they do not follow simple trading rules which can help them make money on daily transactions.
How to Choose Stocks for Intraday Trading?
Intraday trading is completely different from long-term stock investment. Here are some trading rules for Intraday trading that can help you make money.
Rule 1: Liquidity, Liquidity, Liquidity
Liquid stocks are bulky and can be bought and sold in bulk without significantly affecting prices. Intraday trading strategies rely on speed and accurate timing, so the higher the volume, the easier it is to start and end a trade. Depth is also important, which shows the degree of liquidity of stocks at various price levels above or below current market bids and offers.
Rule 2: Medium to High Volatility
Weekly traders need price fluctuations to make money. Weekly traders can choose stocks that tend to move a lot in dollars or percentages because these two filters often yield different results. Stocks that tend to move more than 3% per day move intraday trading consistently on a large scale. The same is true for stocks moving more than $ 1.50 per day.
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Rule 3: Group followers
There are people who specialize in conflicting plays, but most traders look for a stock market that correlates with their sector and index groups. This means that as the index or sector rises, individual stock prices have risen. This is important if the trader wants to trade the strongest or weakest stocks every day. If a trader chooses to trade the same stock every day, it’s wise to focus on that stock, and you don’t have to worry about correlating with other stocks.
Weekly trading is risky and requires knowledge, skills and stock market training.
Conclusion
To identify stocks that are suitable for intraday trading, you need to isolate current market trends from ambient noise and then leverage those trends. Certain features like liquidity, volatility, and correlation feature the best daily trading stocks, but it’s also important to apply the right entry and exit strategies. Studying trend lines and charting price fluctuations can help with this effort. There are many ways to trade and none of them always work. That’s why sometimes it’s best not to play. If conditions do not provide a good environment for deploying a strategy, save your money. You can also get formal stock market training or use the stock trading app that gives guided suggestions to make money.
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