Tips for Intraday Trading Beginners
Intraday trading is the act of trading stocks or shares based on the technical and derivative data points where the entry and exit positions are entered and exited on the same trading day, respectively.
Do note that the stock exchanges are only active during 9:30 AM until 4 PM in the afternoon. During this time, you make suitable trades that will rake you some good money as one of the option trading ideas.
However, how can you be successful in intraday trading? Here are some tips:
1. Look at the Buying/Selling Prices
Whenever you trade, especially if you’re going for intraday trading, it is best that you look at the buying/selling prices. General stock market rules apply. You want to buy shares for cheap and sell them for a higher price for profit.
Since you’re going to be entering and exiting the same day, this means that you work your power of prediction and only get those shares that you assume will increase in prices before the trading day ends.
Take, for instance, the Reliance Industries Limited. The current stock price for buying it is 1118 Indian Rupees and the sale price is 1128. Typically, this is a good trade since you’re earning an additional 10 Rupees per stock.
2. Create a Stop/Loss Target
One amazing way to hedge your assets from severe loss is to create a Stop/Loss or Limit Option. This is where you set a maximum ceiling on how much you’re willing to spend on a particular share so that you won’t lose a lot of money.
This is a perfect tool, especially for beginner intraday traders. For instance, Tech Mahindra Limited has its shares currently priced at 723 and some people expect its price to be 728 by the end of the day. You could set a stop-loss price of 717 so that in the event that your prediction is wrong and the share price has dropped instead of increasing, then, at least, you will only be losing 6 Rupees from the original price that you bought the shares.
3. Set a Target
Lastly, you want to set a maximum target for your trades. This is so that you’re not selling your stocks at exorbitant prices, making people not want to trade with you.
For example, Colgate Palmolive Limited in India has its price currently set at 1140. You could set a target at 1168 because it is still within the realm of a good trade since the price is not at all too farfetched.
Again, intraday trading is all about making profits and making multiple trades per day, ensuring that you’re earning money on each trade.
Now, that being said, you also have to take note that it is not all the time that you win trades. In fact, statistics show that you only win 50-60% of all of your trades realistically speaking. Therefore, although you can earn money on each trade, you should also know that there are times that you’re losing money as well.