The term “intraday” refers to occurs within the same day. The Intraday trading is also known as the Day Trading.The Intraday Trading is a concept that involves buying and selling of stocks within the same trading day. It provides a platform in which we can take a position in the stock market and release it during the same trading day. The intraday trader is a stock trader who opens and closes a position in a share for the same day. The buying and selling of stocks should not be done with an intention to invest but for the purpose of gaining profits by harnessing the movement of stocks. Thus, the rises or falls in the prices of the stocks are harnessed to earn or gain profits from the stock trading.
Intraday trading is also called Day Trading, so the one who enters in this must know the following points:
- Dealing with a good trading method
- Having good money management policies
Also, the person must need four weapons: Confidence, Discipline, Focus and Patience.
How to do Intraday Trading?
For Intraday Trading, investor must do the following:
- It is necessary to deposit amount according to the trader’s credit limit.
- Always select those stocks which have high liquidity and volatility. So, users can enter and exit the market at the right price without having to worry about the buyers or sellers in the market. Examples of liquid and volatile stocks include Reliance Industries, SBI, Infosys, etc.
- It is necessary to understand the basics of the stock. Select the sector in which you are interested in and find shares that you are interested to trading in. Also, consider the stock volatility, liquidity, volumes, etc. and know about the company.
- Find those stocksthat move with the market and thus increases our profit.
- Using strategies to find out right price for entry and exit from a stock. Sometimes, know the resistance and support prices of the stock for the purpose to sell and buy a stock.
- Always have a stop loss and stick to it.
- Now, move with the market trend before taking a long position.
Tips for Intraday Trading:-
As Intraday Trading is a type of risky trading in regular stock market. So, it is necessary for the beginners, whom firstly involvedin such trading, to understand the basics as to avoid them from loss.
There are some tips which help investors to make correct decision:
- Invest the amount according to your budget or that you can afford.
- Intraday traders must dedicate their time from the starting and ends till closing.
- Always try to select highly liquid shares or purchase shares that are highly volume.
- Determine the entry level and target price for purchasing shares.
- Avoid having an investor only or investing in low liquidity stocks.
- For knowing the resistance and support levels, must research your Wish list thoroughly.
- Must allot of 10% to 15% of the stock portfolio for performing day trading online.
- Buy the stocks meeting with best financial gains.
- Make intelligent use or utilization of Stop Loss facility for safe trading.
- Analysis of stocks and trading constantly results in better modifications.
- Creating contacts with other traders and become a member in a network, also very beneficial for getting new ideas.
- Always move along with the Stock Market, which prevents from getting a huge loss.
Strategies for Intraday Trading:-
Main strategies for Intraday Trading include:
- To earn a consistent money on daily-based.
- Keep a proper watch on stock price movements like Open, High, Low and Close.
- Keep a proper watch on stock price fluctuations means stock is moving either up or down by how many rupees or paisa. It gives an idea that on what price share to buy or what price share to sell. It also gives more superior idea or plan for tomorrow’s day trading.
- Keep a close watch on Volume and Price of movement of shares. It means how many buyers are willing to buy share and how many buyers are aggressive to sell shares.
- Remember the stock price movements depend on the volume and the movement of price doesn’t matter where its goes, may be up side or down side.
Profit/Loss in Intraday Trading:-
In Intraday Trading, we buy and sell stocks in the same day.
Example illustrating the profit in market
Suppose we purchase a stock of Rs.5000 and sold it for Rs.5100 on the same day. If the market price is getting up 2%, then we get a profit of Rs.100.
Here, the profit gained by the trader is Rs.100.
Example illustrating the loss in market
Suppose we purchase a stock of Rs.10000 and sold it on Rs.8000 on the same day. If market price is getting down by 2%, then we have lost Rs.2000.
Here, the trader getting lose by Rs.2000.
Advantages And Disadvantages of Intraday Trading
- Intraday trading is best option of those people whom have not sufficient money for trade.With the help of intraday trading, you can increase your money solely with minimum loss.
- Investors of intraday can take profit in both rising and falling market. This is because they can do only short selling to gain profit from the falling stocks.
- Increasing leverage of traders to buy more shares. So, we have to trade with more amounts that we actually have in our account. Suppose, if we have 50,000 in our account, then we can trade with up to 5 lakh as an intraday. This multiplies our daily profits. Positional traders always want high level of investment for getting maximum profits.
- If proper trading strategy is implemented, then no body stops to earn more profits. We have the ability to handle intraday fluctuations in the market in order to get high returns.
- Brokerage commissions are 1/10th for intraday as compared to taking the delivery of stocks. Other charges like service tax, stamp charges, stock transaction tax, etc. are applied on brokerage, so for day trading we have to pay less commission than positional trading.
- In intraday, we have to start the day with cash and end it with the same cash by adjusting profit or loss. So, we can sleep well at night if we are having 100% cash. In case of emergency, we can also withdraw our cash at any time.
- Mainly, trading is done in liquid markets as entry and exit are faster to see profits.
- The intraday trading is not long term in nature as the time frame is limited for one day only.
- Use of leverage results in more losses for the intraday trader.
- Intraday strategy requires more active trading which raises our costs.
- Constant attention of the trader is required and also transaction costs are high. This is because frequent buying and selling of stocks which is not the case of long term investment where the investor will pay brokerage only 2 times at the time of buying and selling stocks.
- Fixing targets and Stop loss are mandatory in Day Trading.
- Very fast and immediate decision making is required for the purpose for getting earning profits.
Types of Intraday Trading:-
Basically, there are two types of intraday trading: Offline and Online.
Offline trading is done when we are not buying or selling shares offline. So, when we place an order to a broker through a phone call or by going to the office. Broker plays a major role in this type of trading as he sells or buys our shares after the placing an order by the trader. In offline trading, the trader has to fill up all personal details and signed on a pre-printed slip and gives this to the broker for doing selling or buying of shares.
Online trading the trade is usually done online by personally you. In online trading, the trade is happens in front of the traders and trader must place the order with the price. In this, our trading account is linked to our demat account. So, the shares are automatically got debited and credited to the account.
Example of Intraday Trading:-
Here are two examples of some known companies:
- Suppose taking the example of Reliance Industries, the buying price is Rs.1000 and Stop Loss is 2% with a target of 8%.
- So, the shares purchased on Rs.1000 with entry level and exit with the margin of 6%, which is the best intraday call.
So, the buy price of 100 quantities of Reliance Industries of Rs.1000 should be Rs.100000.
And the selling price of 100 quantities of Reliance Industries for Rs.1000 must be equal to Rs.106000.
So, Reliance Industries get a profit of Rs.6000.
- Another example is of Tata Power Industries. Let the buying price is Rs.3000 and Stop Loss is 3% with a target of 10%.
So, the shares purchased on Rs.3000 with entry and exit with the margin of 5%, which is the best intraday call.
So, the buy price of 100 quantities of Tata Power Industries of Rs.3000 should be Rs.300000.
And the selling price of 100 quantities of Tata Power Industries for Rs.15000 must be Rs.315000.
So, Tata Power Industries get a profit of Rs.15000.
How Trading Company do Intraday trading:-
Trading company in Stock market provide the best Intraday Trading services to the investors. New investors who firstly arrived or entered in this market are unknown and have not brief knowledge about the intraday calls. Our aim is to gain maximum profits and minimise losses from the market. There are more opportunities in the Stock Market but there is a need to choose the correct one at the right time. We help our clients in taking the right decision for all the needs to gain more profit in Stock Market with the help of intraday trading calls. We provide not only help but full support to the clients to achieve their targets from intraday trading. We keep a sharp eye on our stocks till at open positions and provide proper entry as well as exit points at the right time. We also keep a constant watch on all the global markets that are worldwide, Economic conditions, News and results going on which affects the Indian Stock Market. We treated investors’ money as ours so we determine the correct one before to start Intraday Trading.
The company maintain clients’ growth through the competitive market place knowledge and an investor’s view of market, enriched with personalized and customized services, innovation and seamless execution.
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