In the stock market making wealth with Intraday Trading is going to be super easy once you start learning the art of chart reading and predicting the Support and resistance.
Intraday trading is a skill based trading which mixed with perfect entry, quick exit decision, mental preparedness with percentage of booking profit or loss and a well trading plan. Once you planned to buy an intraday call, there after two things remaining, either book profit or stoploss, there will be no such analysis after entry, so plan well before entry.
Hey, don’t be worry, I will discuss here the proper ways where you get analyze a perfect entry and exit.
If you click article means you must have know what is a real Intraday trading or very keen to know it. Before diving deep to the just have an idea about intraday trading.
What is Intraday Trading?
Each stock and indices have a trading instrument called “Intraday”, where you can buy or sell shares within trading hours. The timing of intraday trading starting from 9:15 am to 3:30 pm in NSE.
If your able to predict the market is going to bullish (share price is going to increase) then buy some shares and wait till it reaches your target price, then book your profit. If your analysis says its a stock price going to decrease now or today (bearish) then you cam sell also in intraday only till your target reaches.
How Intraday is different from investing?
Investing in general is a long term share holding case without using any leverage. The amount of risk and reward is also low so. But in intraday its only tradable in one trading day and can’t carry forward to next day. In intraday also stock brokers provide leverage for trading which is not available in investing. Ultimately Investing needs fundamental analysis with patience, where as Intraday needs technical skills with a trading psychology.
Intraday in different instruments is tradable, like stocks, future and options of indices as well as stocks.
What Successful Traders know About Intraday Trading That You Must Know
Before taking a trade for Intraday Most important points to be taken care of
1- Trade with High Volume stock , so that entry and exit will be faster. So, my suggestion will be try to trade in Large caps or Midcap stocks.
2- Avoid too high price Stocks: Like MRF, Page industries, Shree cement etc, the volume issue happens during intraday. You can trade with low quantity.
3- Best time for intraday is 9:20AM to 11:00 AM, and after 2:00 PM to 3:15 PM: From 9:20-11:00 AM, like morning shows the day, candle stick also shows the direction of the day. If price has to go up, it will move maximum with large volume by first quarter, then stocks move side wise, and at the last hour another movement happens. This is in general, I am telling with my personal experience which made me profitable, exceptional are always there in market. First 5 min 9:15-9:20 AM of candlestick is highly volatile, difficult to predict the direction.
4- Choose a suitable time frame for the trade setup: You may be good in 5 min Time frame or 15 min time frame, only these two considered to be best for intraday.
5- Risk management is the key: Only try to trade with 25-30 % of your capital in the Demat account. More than that will be risky and if any thing goes against your trade, recovering the capital in next trades will be very difficult.
6- Set Your Psychology: Psychology plays a very important role in trading than anything. Once you book a loss, try to give a break, otherwise what happens, you try to take revenge from market hence overtrading happens, which most of the time leads to more loss. Always you have a chance of re-entry.
7- Everyday is not Your Day: That’s correct, every day market is not trending, the day you find side wise, there was chance of overtrading. So, try to set your mind that you are cant be everyday profitable, some days will be dry day or limit your loss, wait for a big day.
8- Count your Profit & Loss in Percentage wise not in amount Weekly or Monthly. This is what all successful investors and traders do.
How to find the A perfect entry for Intraday Trading?
There are only Two things of entry, either buying entry or selling entry. Buy at low and sell at high.
Looks simple, right? Lets discuss about the perfect buying entry.
First of the thing you will be able to find the Support in the candle stick is important. The entry will be the supports line and the target will be the next resistant.
There are some important patterns which helps how you will decide the support and resistant in the Candle stick chart.
Now in the below pattern you can see multiple times price has bounced from support line.
Selling Patterns