How to do Intraday Trading? Here’s the Beginners Guide on Stocks for Intraday Trading
If you are interested in exchanging, then you already know that there are basically three types of investment. One is the long term, where high returns are usually gained after a gradual process.
Number two is the mid-term process, where traders usually hold the stocks for 5 days to several weeks. The third one is the short-term investment where traders buy and sell the stocks on the same day. This third one is called intraday trading.
Now the next set of questions that would come to your mind is, how to do intraday trading? What are the hidden tips? How to select stocks for intraday one day before? Is there any fixed timing? What are the charges? Well, hold on there! We have got all your answers covered here. What you need to do is just read till the end.
What makes Intraday Trading Different from the Rest?
Every type of exchange is different from the other one for various reasons. For intraday trading, what makes it different from the rest is the delivery timing of the stocks.
In intraday exchanging, traders have to buy and release the stocks on the same day before the market closes even if that leads to loss. But in other exchanging methods, the trader can choose to hold the stocks for a period of time, be it long or mid-term.
So now that you have got some basic idea about the differences between intraday and other modes of exchange, let’s talk about how to do intraday trading.
How to Do Intraday Trading?
To make a good profit in trading, it is important to understand the basic fundamentals of it and intraday trading is no exception. For any type of trading, there is a basic rule and that is, if the market is falling, sell faster than you buy.
Unless you are a pro in trading, always go for liquid shares and get indulged in a limited quantity of share exchange. Also, chalk out a plan so that you can limit your losses if the market doesn’t respond well.
In case you are wondering how to select stocks for intraday one day before? Well, there are multiple tools available online which give you a clear idea of the stock’s current market trend. You can check those tools and pick your stocks for intraday trading.
Now let’s understand the basic steps to keep in mind before you get into buying stocks for intraday trading.
Intraday Trading Tips
#1. Intraday Trading Entry & Exit Time
The first tip for intraday trading is to look out for patterns that will eventually help you in preparing stop-loss strategies. These strategies will help you find out the low-risk entry points in a day.
As already said before, you should put a limitation on your loss. In the same way, you need to control your greed and put a profit limit also. Once you reach either of these two limits in a day, you know that it’s time to release your stocks for intraday trading.
#2. Never do Go without Stop-Loss Strategy
Exchanging is an endless loop where you can keep on going and going making profit or loss. Making a good amount of profit is tempting but facing uncontrollable loss? Doesn’t sound very nice right?
Well to not encounter huge loss, you should always have a stop-loss strategy pre-planned (We are being repetitive about it but by that, you can understand how important it is).
#3. History is the Best Teacher
If you are a beginner at exchanging stocks, then you should swear by history because as they say ‘History repeats itself’. The agenda of any trader at the beginning stage should be to find stock names that are not too risky and have a stable history.
Even though it can not be said with a full guarantee, usually the stock market witnesses that stocks generally follow the path they already traveled before.
#4. Keep the Big Investment for Future
We know you are super excited about your new exchange journey but hold on right there before you make the big mistake. No matter how confident you are, you need to understand that it’s too soon to make a big investment.
In the beginning, you should only focus on a maximum of 2 stocks for intraday trading so that even if you face loss, it will not harm you much rather will help you get a better understanding of the market’s fluctuations.
You can start increasing your investment volume as you gain experience in exchanging stocks.
Intraday Trading Charges
The intraday trading charges are variable. Generally, it can range from 0.01% to 0.05% of the amount transacted., but this largely depends upon stockbrokers.
The Bottom Line
As a beginner, it’s not easy to master the art of buying and selling stocks for intraday trading just after reading a single article on it. To understand it better, you need to give it more time and look out for notes from expert traders and also need to understand that this type of exchange is not suitable for every investor.
To get real-life experience, you can start with a small volume of investment and see how it goes. As already mentioned above, it’s not easy to get a grip of it but as there are multiple analytic tools available nowadays, you can definitely do your own research and then start your exchange journey. Best of luck!