"The Basics of Intraday Trading in India include understanding the Nifty 50, setting up a trading account for systematic trading, analyzing stocks, creating a customized trading plan, managing risks, and using proven strategies."
"Intraday" means "within the day." Intraday trading involves buying and selling stocks or financial instruments within the same trading day. Traders also use the term "intraday" to describe the highs and lows of a security's share price during a trading session. In India, intraday trading has gained popularity since the lockdown as more and more people are interested in making quick profits from the stock market while working from home.
Basics of Intraday Trading in India
- Understanding the market involves knowing the different types of stocks, indices, sectors, and factors that influence the market. To understand the stock market, it is important to know about Nifty 50.
2. Nifty 50 is a stock market index in India that represents the performance of 50 large, well-established companies listed on the National Stock Exchange (NSE) of India. Sectors such as banking, information technology, automotive, and consumer goods are covered in the Nifty 50. The index is widely considered as a benchmark index for the Indian equity market and is owned and managed by the India Index Services and Products (IISL), a subsidiary of the NSE. The composition of the index is revised every six months based on factors such as market capitalization, liquidity, and sector representation.
The Nifty 50 index is used by market participants, including institutional investors, traders, and fund managers, as a benchmark to measure the performance of their portfolios. It is also used as a barometer of the Indian economy and its stock market.
3. To start intraday trading, Setting up a trading account: you need to open a DMAT trading account with a brokerage firm. The broker will allow you to buy and sell stocks on the exchange. Learning how to analyze stocks involves looking at the company's technical and fundamental analysis, as well as other relevant information.
4. If you want to earn regular profits from trading, then you need a well-defined trading plan that outlines the entry and exit points, stop loss, and profit targets for each trade. You also need to decide your trading capital and manage risk effectively by setting stop loss orders to limit losses and using appropriate position sizing. Being disciplined and having a trading mindset is important for successful intraday traders who follow their trading plan rigorously, keep their emotions in check, and avoid making wrong decisions.
5. Being disciplined: Develop Trading Mindset. Successful intraday traders are disciplined and follow their trading plan rigorously. They also keep their emotions in check and avoid wrong decisions.
How does intraday trading work?
You might have heard, Buy at low and sell at high. When the stock price reaches a certain target for that day, or the trader thinks the price reached its intraday high, they’ll then close their position by selling the shares back onto the market.
Traders also look at support and resistance levels to analyze which way a stock price is headed. Support represents where demand is more than supply, and resistance is when a stock reaches a gradual high and supply is more than demand.
Trade in the direction of the trend :
One of the most basic trading principles is to trade in the direction of the trend. Markets tend to move in trends, and that it is easier to make profitable trades by aligning yourself with the direction of the trend.
How to identify trend of the market ?When a market is in an uptrend, it is making higher highs and higher lows, and the overall trend is upwards. Opposite to that, In a downtrend, the market is making lower highs and lower lows. You can make money if you follow the trends.
Trend is friend until it bends
What are High accurate intraday trading strategies using by Pro traders?
I am writing here top 4 Best Intraday Trading Strategies for beginners
1. Trading with CPR : - Trading Strategy using Central Pivot Range (CPR)
CPR is the best and Leading indicator. CPR indicators can be used to identify market bullish and bearish trends and take respective trading positions. When the stock is trading above the R1 ( Resistance 1), it is a strong indicator of a bullish trend. If the stock price is consistently lower than the S1 line, it is a strong indicator of a bearish trend. So Look for bullish price action above r1 and trade. If you find bearish price action below S1 then sell. Offer : Learn detail in the Live Session.2. Moving Average Crossover Strategy : SMA Crossover Strategy
2. Reversal day Trading Strategy for beginner
- Moving average is the average of 20 candles. It smooth the Price data,
- A moving average crossover is a technical tool used in trading to identify potential entry and exit points.
- The technique is based on the idea that moving averages are a lagging indicator, meaning that they follow price movements, rather than leading them.
- While a moving average crossover may not capture exact tops and bottoms due to its lagging nature, it can help identify the bulk of a trend.
- If the moving averages cross over each other, it could signal that the trend is about to change soon, giving traders the chance to get a better entry into the market.
- crossover technique works best in a volatile and/or trending environment specially above R1 and below S1, but may not be effective when the price is ranging.
- Using a crossover system offers specific triggers for potential entry and exit points, which can be useful for traders to plan their trades accordingly.
I use apply the Reversal Strategy for both Day Trading and Swing Trading. The primary reason I like my Reversal Day Trading Strategy is because it gives us the opportunity to enter a stock very close to support. Most of the time, when a trend ends, the market ends up consolidating in a range for a period before a new trend begins.
Criteria for a reversal stock candidate
3. Pull back trading strategy :-
- 70 % all new high gets failed. Hence I look for stocks hitting new highs or new lows.
- I look for at least 3 to 4 consecutive 5min candles of the same color
- I look for CPR or Pivot Points Resistance or location of price from the Weekly CPR.
- I think of these stocks as a rubber band, the more stretched out it is, the better the snap back potential.
- Entry with the trigger candle with relatively high width.
- I use trailing stops to keep myself in these winning trades as long as possible
The idea behind pullback strategy is to ride the momentum back in the direction of the original trend after pull back. A strong trending market has a shallow pullback and remains above the 20MA (for an uptrend).
Here are the basic steps to implement a pullback trading strategy:
4. Breakout Trading Strategy
- Identify the dominant trend: This can be done by using technical indicators such as CPR indicator, moving averages or trend lines.
- Wait for a pullback: Pull back is temporary price correction in the opposite direction of the trend. Once you have identified the trend, you'll want to wait for a pullback or retracement in the price.
- Look for support/resistance levels: As the price retraces, look for areas of support or resistance that could act as potential entry points.
- Enter the trade: Once you have identified a potential entry point, enter the trade in the direction of the trend. This can be done using a variety of order types such as limit orders, market orders, or stop orders.
- Set stop-loss and take-profit levels: To manage risk, it's important to use stop-loss and take-profit levels. A stop-loss order can be placed below the support level to avoid potential losses, while a take-profit order can be placed at a predetermined target level to lock in profits. Or Double of the Risk.
- Manage the trade: We have designed Trade management software that avoids the potential losses in the Intraday Option buying and stock trading. You can contact our customer care to downloads it WA 7391841111
Breakouts are common after consolidation. Once you identify a potential breakout, wait for confirmation of the move. This can be done by observing the price action and looking for a strong move through the support or resistance level.
Enter the trade in the direction of the breakout. For example, if the breakout is to the upside, enter a long position or Buy stocks.
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