Intraday Trading is the form of trading which includes buying and selling stocks within the same trading day. Intraday Trading is generally used as a temporary profit-making option. The profit from Intraday Trading is achieved by controlling the fluctuations in prices of stock. It completely depends on you how you want to set your approach towards it.
You can buy a stock and sell it within seconds, or you can keep that stock and sell it after hours but on the same trading day. That is why Intraday Trading is not suitable for long term vision but can give a sufficient amount of profit within a short time. Intraday Trading is considered as one of the most controversial practices in stock market investing. Web day trading scams have tempted amateurs to offer big returns in a limited period. The belief remains that this type of dealing is a get-rich-quick scheme. But this should not be the approach for Intraday Trading because it includes a lot of strategies and planning to succeed here. To begin your Intraday Trading, you should have a trading account, and then you will be able to buy and sell the stocks.
INTRADAY TRADING TIPS FOR BEGINNERS
Here are the following starter tips to avoid less amount of losses during your trading:
COMPLETE KNOWLEDGE OF CORPORATE SECTORS
Before you start dealing in buying and selling stocks, you need to have a sound knowledge of technical analysis of the sectors you are trying to invest in. Reading and analyzing the company’s growth and losses statistics will make you gain ideas of how the company deals in difficult times. As an investor, you should know about corporate events like dividend payments, mergers, stock splits, bonus dates, etc. Always referring to the internet for updates is a beneficial way of dealing with the situation. Share market is the location where shares are exchanged between various firms. Two main exchanges operate in India; the National Stock Exchange (NSE) and the Bombay Stock Exchange ( BSE). Nowadays all dealing happens at the broker ‘s office or on the internet via computer terminals. An investor with less knowledge has very little chance to pick out the profitable stock.
2. PAPER TRADING FIRST
After gaining the knowledge, you cannot directly jump into real trading because the stock market is full of unpredictability, and you may face serious losses. We advise you to practice with a fake paper currency before putting real money for at least three months. Once you feel that you are getting an idea of how everything works, then only you can start thinking about real trading. During the three months, you should note down every statistics of the stock you bid with non-existent currency. It will give you a rough idea of what approach towards stock give you positive results and also what approach brings you down.
3. LEARN TO ACCEPT LOSSES:
Yes, you heard it right; you cannot dishearten yourself whenever you had a bad day as it may affect your mental health seriously. The inclusion of real money makes the losses more impactful in our life. A good investor always has a proper strategy to deal with losses, without planning of escape route you may find yourself suffering from anxiety, depression, and loneliness. Especially in Intraday Trading, you must have a strong mindset to face the loss because the market risk is very high in Intraday Trading. An investor should learn taking losses and should understand that losses are a part of investing.
4. PROPER FINANCIAL STRATEGY:
As an investor, you cannot put every penny on the line for bidding because one bad day can ruin everything. A successful investor always invests that personal money only, which is considered as surplus money and does not affect daily life. You should have a clear idea in your mind that the money you kept aside for trading must be used under a proper strategy. You should know which stock has the maximum chance to give you the profit and how much amount you should put in a day. Making yourself bounded by limits of investing money is a must-do thing. You should not exceed the limit you already set for your day; controlling the emotions is a vital thing here. The emotions can of many forms which will lead you to invest more. Happy, sad, angry, or greed don’t allow any emotion to ruin your financial strategy.
Day traders use numerous intraday strategies. These strategies include:
Scalping, Range trading, News-based trading, High-frequency trading (HFT). Try to know about every strategy before investing.
Here is a financial strategy we are offering. First, you need to make the concept clear that the returns in Intraday Trading are very high. But, the risk involved is also high. Loss and profit are a part of investing, and of making a personal profit, you should have a calm mind. Look for a 30-day plan. During those 30 days, there will be ups and downs, some days will bring glory, and some days will bring disheartening news. The actual goal of this strategy is summing up of the 30 individual days that must give a positive balance in the account.
5. STAY UPDATED
The corporate you are willing to invest, you should make your self up to date about their performance. The more you start to know them more predictable their stocks will be. Sound knowledge regarding the performance chart includes the quarterly report. A quarterly report is the financial statement that the company issues after three months of referring to the investors. Also, know about the corporate events that the company is organizing and how will it affect the stocks. The best way to predict the stock of a particular company is to go through the past, what happened to the stock when the company hosted a similar event in the past. A little research can make you ahead of many investors.
It was a small effort from our side to make the beginners aware of investing in the stock market. Also, what approach they should have to start their trading. I hope we were able to deliver the required tips for newbie Intraday investors.