in the present time stock market is one of the best money making tool in long term as well as in short term, so most of the people tends to attract towards investing in stock market among which most of the peoples are beginner investor and experienced trader. here the beginner investor used to do trading due to lack of knowledge and experienced trader used to do trading because of higher knowledge about technical's and market movements.
so if you want to know about what is intraday trading? best tips for intraday trading and some of the other aspects related to it then you can read this article because here you can get to know about various intraday trading things that might helps you to stay at a safer side even while doing intraday trading along with making higher profits at the same time.
what is intraday trading ?
how do you make money through intraday trading ?
intraday trading tips.
the bottom line.
what is intraday trading ?
buying and selling of stocks on the same day with the major perspective of making profit out of transaction is known as intraday trading or one day trading. it is the most common definition of intraday trading. but it is not that simple as it looks. intraday trading incurs various different activities and works that a trader have to perform in order to earn money out of stock market.
while trading in stock market most of the traders used to know how to play with the stocks in short run to make higher profit, they used to perform such activities like analyzing technical's of the companies, reading the charts and graphs, observing the market upward and downward trend, short term fundamentals and so on.
making money from stock market is a quite simpler task but due to some reasons and consequences sometimes making money from stock market through intraday trading becomes difficult as well due to high volatility and other resuming factors.
how do you make money through intraday trading ?
buying and selling of stocks from stock market is as simple as buying and selling of any goods from supermarket. for example, in supermarket you can get various options regarding any product which you wants to buy similarly, in stock market you have so many options of various companies stocks in which you can trade and make money out of it.
so, how do you actually make money through intraday trading in stock market, lets take an example of a company stock whose share price is moving around 100 rs and you brought 1000 shares of that company at 100 rs in the morning and after few hours if the market price of the stock reach 120 rs then it means you've made a profit of 20 rs on each stock i.e. 2000 rs profit in just few hours.
rather than this simple intraday trading many traders also used to prefer short selling and other kind of tradings like momentum trading, swing trading, trend trading and so on which helps them to maximize their profit to a greater level.
intraday trading tips.
1. choose liquid stock.
while looking for intraday trading tips and tricks you can find this point very frequently which says to trade in a stock which stays highly volatile during the whole market session. because volatile stocks help in making profit for the traders. you can select mainly two to three liquid stocks at a time to reduce risk factor, however sometimes diversifying your portfolio among high number of stocks while intraday trading can also creates confusion and leads to loss of capital investment. trading in liquid shares also requires huge time to spectate market fluctuations, so investing in very few stocks at a time would be a great tip that you must follow.
2. stick to the target.
stick to the target is also one of the good tip that you must follow while trading on intraday basis. after investing in a highly volatile stock, most of the traders used to select a target at which level they wants to book their profit by selling their holdings, but sometimes even after the breakout of the target levels they hold the positions with a greed to earn more profit from the holdings, which adversely cause in sudden fall of share price and then they have to book their profit even at a lower price than desired. for example, if a person buy's a share at a price of 100 rs and decided to sell it at 105 rs and when the share price reaches the desired level if he sell the share at that position than it is said that he is stick to the target. but, if he didn't sell the share at desired level and hold it for more time than with a view to earn some more returns then it is said that he is not stick to the target.
3. stop loss is a must.
for a trader stop loss is one of the most important tool that helps him to deal with the losses due to stock market fluctuations. so using stop loss for all of your trades executed is also a good tip that you must follow while trading on intraday basis. stop loss is a tool provided by your stock broker to be placed while you're making your trade setup. for example if you were placing an order at price level of 100 rs and don't want to bear loss more than 3 rs on each stock than you can put a stop loss of 97 rs. when the market price of the stock reaches the particular level then the broker automatically sell all the positions that you held in your demat account.
4. understand market peak point.
understanding the market peak point is one of the major quality that a trader must develop while doing intraday trading in stock market. most of the traders don't have enough trading knowledge which cause them to lose their capital investment. so it is one of the best intraday trading tips for beginners and for existing traders that they must follow. here, understanding the market peak point refers to the higher level of the stock at which it is getting traded on the same day. it helps to book profit at higher levels. according to traders mindset, due to high liquidity there's a probability that the market will move further in upward trend, but sometimes the decisions becomes wrong and due to sudden fall in share price they have to book profit at lower price or sometimes even at loss.
5. listen to your mind.
while trading on intraday basis in stock market there are few occasions occurred where a trader have two options among which he have to select only one option, at that point he have to select the option according to his mind or on the basis of his emotions and feelings. for example, if a trader buy's 100 positions of some particular share at price of 100 rs and thought to sell them at 105 rs, so after reaching the price target a trader must listen to his mind and sell the stocks, but sometimes due to high emotions a trader might get distracted from his price target and didn't sell the positions which may again cause him to loose his money. it is one of the most important intraday trading tips for beginners, as it is mostly seen with this kind of traders.
6. never invest all.
while trading in stock market the common mistake made by newbie traders are investing there complete fund at a single time. according to successful traders investing your complete fund at a time cause a huge loss for you because at a time of recession you don't have enough money to average your positions due to losses. while trading on intraday basis many times it is seen that the predictions to become wrong and fall in capital investment due to fall in stocks price and at that time the beginner traders or any other traders might don't have sufficient funds to average their positions and may incur huge losses due to intraday trading. so, never investing all of your funds at a single time is one of the best successful intraday trading strategies that you must follow.
7. live below your means.
living below your means is also a good intraday trading tip that you must follow. in order to earn higher returns from stock market, many traders used to take loans and higher leverages to gain higher returns which may cause them some greater consequences. due to high volatility in the market the invested loan amount may got dissolved very easily and it becomes very difficult to regain the invested amount. so investing your own funds is a successful intraday trading strategy rather than that according to various successful investors investing your own funds and depending on your personal decisions can actually helps you to gain higher returns through intraday trading.
the bottom line.
from the above information you might've cleared so many of your doubts regarding intraday trading and also you've got some good intraday trading tips that you must follow while performing your successful intraday trading strategies. you can follow this tips to maximize your profits during the trading sessions.
rather than this many beginners were get confused between trading and investing at the beginning of their investment journey, so here you can get to know about the difference between trading and investing which you can read to solve your further queries.
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