Four Ways to Succeed in Intraday Trading

Intraday trading is buying and selling of stocks in the same day. Trading large quantities with small margins is the secret to making money in intraday trading.

The unwritten rule of intraday trading is to stay away from greed and haste. With India’s biggest advisory Championship called Pro Advisory Championship, quickly approaching, this may be the right time to enrich the mind with the most useful tips for successful intraday trading.

Read on to find out the four best tips prepare by SEBI registered investment advisors/Research analyst for the intraday trade competition hosted by Advisorymandi.com.

Ride with the trend

The most significant step in intraday trading is identifying the right stocks in order to prepare oneself for the right judgement, the historical intraday charts must be studied thoroughly and in-depth. Stocks showing upward and downward movements frequently must be focussed and reasoned out. Following this, the previous day’s chart must be individually analysed for its support and resistance level. The best approach is to use the previous day’s support level to make the purchase and then use the resistance level to short.

Know when to enter the trade

A large number of people jump into the market right after it opens up. This increases the chance of risk and thus investors are recommended to observe the trend for about 30-60 minutes after the market is set open. Adopt a phased approach while entering into the market to mitigate potential threats. For instance, start by investing only 25% of the amount allocated to be spent and wait to read the direction of the market. Follow up with another 10-20% based on the trend observed.

Determine the value area of the trade

Value area is the price range within which the maximum volume of trade took place the previous day. The value area of the trade must be observed on a daily basis and then combined with the 80% rule** to judge the direction of the market efficiently. When the market opens above the value price range, then investors must opt for a short position towards the upper limit of the value area and choose a long position towards the lower limit if the market is below the value area.

• If the market moves above or below the value area and takes two continuous half-hour periods, then the chances of the market filling up the value area is more than 80%.

Keep a strict stop loss when the market is moving in the opposite direction

To start with, do not panic when the trade trails in the opposite direction. The stop loss must be set strictly to avoid heavy losses. When the stop loss triggers, it is clearly a warning sign. When in profit, one must book profit or alternatively set a stop loss for profit and revise it based on the movement of the stock. Failing to set the stop loss or booking the profit may lead to loss. In intraday trade it is best recommended to book profit while witnessing each high and pausing to check the direction of the trend.

Successful intraday trading is a lucrative option to gain some big bucks. The recently announced Pro Advisory Championship which is India's biggest advisory battle maybe the right time to put these tips into the best use and reap incredible benefits.

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If you want to read more about Pro Advisory Championship, the author of this article recommends Advisorymandi.com.