You might already be aware of the fact that there are two ways in which you can trade in the Stock Market. One of the ways is to take the delivery of the security and the second way is intraday trading. Taking Delivery of the stocks is more of a long term investment plan whereas intraday trading will reap benefits on the same day.
There are traders who earn anywhere from Rs 500 to more than Rs 1 Lakh on a single day and this is what the beauty of Intraday trade is. If you also want to start with the intraday trade then we are going to share some of the tip is with you so that you can also book profits at end of each trading day. Here are the tips.
Best Intraday Tips: Intraday Trading Tips for Beginners
Fundamental Rules before You Start Trading
- Advice from Groups – Even before you start trading, exist all the WhatsApp groups that you have joined for getting advice on the best stock. This would hardly work for you and in most of the cases, you will end up making a loss. Never follow the group advice in any form.
- Bet Only What You Can Afford to Lose – The second thing to take care of is that invest only what you can afford to lose. Never borrow money from anyone to invest in the intraday. This is because of the fact that an uncertain even can wipe off your capital easily.
- Calculate the Risk – Always calculate the risk. Do not just trade on the speculations as this is more of a gamble. Research, analyse and then take the decision about the investment. Understand the loss that you might face and also calculate the risk to reward ratio.
Basic Understanding
- Read News and Stay Updated – It is important to stay updated with the news everyday if you wish to trade. For example, if you know that the decision is coming today for repo rate revision then you can expect markets to be volatile. Similarly, understand the impact of other events like the elections, government policies and other such macro factors. They will help you in predicting the direction of the market.
- Global Markets – You should make it a habit to check the global markets before the start of the trading day. You can easily check these by visiting the Finance Page on Google as it displays the stock index of all major world markets. This is another way you can predict the direction of the market.
- Understand the Trade and Markets – You must also understand how the trade works and remember that the markets are often driven by sentiments. Remember that the trade might take time to get executed as it is always about demand and supply.
- Options and Derivatives – You can also explore different securities like Options and Derivatives. You can trade on Nifty Index Options and this way, you can also get the benefit of leverage. A single trade can help you in booking a profit of Rs 200 to Rs 400.
- Virtual Trading – Before you jump into the market, try virtual trading. There are free platforms like NSE Paathshaala which can help you in trading virtually without using real This will help you in getting the taste of the real market.
While you Trade
- Bracket Orders & Stop Loss – Almost every trading platform will provide you with the option to put in bracket orders. In bracket order, you can set the upper limit as well as a lower limit for your order. For example, you purchased a stock for Rs 50. With help of bracket order, you will be able to put in an order where the stock will be sold if it reaches a certain amount in any direction. So, to book profits, I will put in an order to sell my stocks when it reaches Rs 52 or when the stock falls till the level of 49. This basically helps me in booking profit as well ensuring that I do not incur a huge loss in a single trade. These bi-directional orders should always be used.
- Ceiling Level and Support Level – Check out for the ceiling level and the support level of the stocks. This will help you in understanding the lower and upper bound for the stock. You will get an idea about the volatility that you may face in stock.
- Technical Analysis – Learn about the technical analysis and check for the candle charts. Get an idea about the patterns and this will basically help you in predicting the direction of the stock price. Technical Analysis is a great skill for intraday traders as this tells you when to enter the market and when to exit the market.
Intensify the Games
- Economies of Scale – If you buy a small quantity of stocks then you will have to wait for a big jump in stock price so as to cover up for brokerage and other taxes. In such a case, always trade in huge quantities. For example, a rally of 50 paise in Nifty options can help me in booking a profit of over Rs 200 if I am trading 10 lots of the option.
Final Advice
- It is Okay to Make Loss – Remember that you will make losses sometimes and it is absolutely okay to make a loss. If you are making a loss then you must remember that it is important to understand why the trade went wrong and learn from it.
- Keep Away the Greed – A lot of beginners get carried away by greed and quick money but you must stay away from it and set a limit for the profit that you wish to book in a day. Greed can make you take impulsive decisions and this way, you will end up losing money.
- Discount Brokers – Most of the trading platforms would charge you a high amount of brokerage. In such a case, it becomes even more difficult to make the profit. We would recommend you to try discount brokers as the brokerage there is minimum and it makes it easy to book profits that way.
These were some of the best intraday trading from our side. We hope you would try and implement the ideas and reap profits from your trades.
Santosh Kumar is a Professional SEO and Blogger, With the help of this blog he is trying to share top 10 lists, facts, entertainment news from India and all around the world.