Best Intraday Trading Strategy || How To Do Intraday Trading ?

Top 4 Intraday Trading Strategies

How to do Intraday Trading?

It is most important for an intraday trader that he should know about the best intraday strategy. Today in this article go to best intraday trading strategies.

Intraday trading strategy involves medium to high level strategy like intraday charts, trading indicators, candlesticks patterns, how intraday trading tricks work together. If you are a beginner then the basic concepts of stock market should be understood first. Trading without a strategy is full of risks.

Before we talk about the best intraday strategy, let us first understand what is intraday trading.

Intraday trading mainly involves making short-term profits, such as buying and selling shares by trading in a day's trading session.

Different traders try to use the best intraday strategy at their own discretion but there are many myths and beliefs associated with it.

Some people believe that it is a way to get rich in a short period of time, which is not entirely true, while others believe that it is impossible to make profits from intraday trading in the long run, which is not always true. To become a successful trader, you must stick to certain intraday trading rules.

Intraday Trading Strategies

Intraday trading is a balancing act. To be successful in intraday trading requires a lot of dedication, patience and extensive knowledge. A successful intraday trading consists of 90% patience and 10% execution.

A trader can make good profits in a very short span of time if he/she adopts the best intraday strategy. And if a trader is consistent with the right strategies, he can sustain profits over the long term.

To become an expert in day trading, it takes enough time to hone the skills. Theoretically, there is a long list of best intraday strategies. However, the success or failure of the best intraday strategy in day-trading entirely depends on the market.

An intraday trader needs to be very flexible and adaptable with his strategy. He should be ready to change his strategies and adapt himself to the market at any point of time

Also, there is a need to practice and work on your intraday trading strategies and skills and there is a need to constantly adapt to new scenarios and make strategies accordingly. An intraday trader also needs to know when to buy shares.

Some traders are very active. Executes multiple trades in a single day with large position sizes. They catch even the slightest change in the share price.

 Momentum Trading Strategy:

Intraday trading is dependent on momentum. It is all about trading with trending stocks. There are always some stocks in the market which show fluctuations of 20-30% every day. Now here a trader has to identify these stocks before there is any major movement in such stocks. A stock scanner can be used to find such stocks. Stocks with such potential momentum are always above the moving averages with no nearby resistance. 

The relative volume of these high momentum stocks is also high. The momentum of a stock can be due to fundamental factors like earnings. But momentum can also be created without fundamental backup and is called a technical breakout.

Thus in momentum trading strategy, traders focus on stocks with momentum, i.e, stocks that are moving significantly in one direction and high volumes. A trader can take into account the speed of movement and changing direction of the stock to hold his position and depending on that can hold the position for a few minutes, hours or a whole day.

Momentum trading strategy mostly works in the initial hours of the trading session or during news spikes which bring in a lot of volume in the stock. And trading is mostly done in 2:1 profit loss ratio.

This is one of the best intraday strategy using which you can generate profits in a short span of time. To use this strategy properly, you can depend on indicators like Relative Strength Index (RSI).

Reversal Trading Strategy: 

Reversal trading strategy is also very important in best intraday strategy. This strategy allows the security to trade very close to the support level. As always said, buy low and avoid high. This trading strategy helps the security to take a position very close to the support level and gives an opportunity to set a stop. The stop in a reversal trading strategy is always close, as the position has to be taken close to the nearest high or low. This helps in providing a good risk-reward ratio. Reversal intraday trading strategy lowers the bar and increases the success rate.

In reversal intraday trading strategy, traders look for stocks that have made higher highs or lower lows. This also increases the possibility of their reversal.

As soon as the security starts to reverse, a stop is marked and a trailing stop is used to stay in the trade as long as possible. Also, one can close the short positions to prevent any possible losses and can look to take profits by taking long positions in case the price moves up. To identify the reversal coming in the market, you can use the Average Direction Index (ADI) which gives you information about the reversal coming from the decreasing strength of any trend.

 GAP & GO Trading Strategy :

Best intraday strategy Gap and Go. The intraday trading strategy focuses on Gappers. Gappers are securities that show a gap between prices on the chart - when the price moves up or down but the price is not traded. Gaps can be created by a variety of factors such as an important announcement ahead of time, a news release of some kind, or a change in analysts' outlook.

Gaps occur at the opening time of the exchange due to difference in demand and supply and are quite common. Gaps are used by experienced intraday traders to make profits due to the formation of Equilibrium. Gappers can be seen in the first hour of trading and a range is established. A move above the range signal indicates a Buy and a move below the range signal indicates a Sell.

Gap and go strategy traders look for gaps. As a thumb's rule, traders take positions in the same direction of a minor trend.

For gap in the opposite direction of the minor trend, the position is taken opposite to the minor trend with a stop-loss.

The most important feature of the Gap and Go intraday trading strategy is to make small profits in a short period of time with very little risk.

Bull Flag Trading Strategy :

A flag is a pattern that forms when a stock price moves strongly, forming a flagpole, followed by a systematic and diagonally symmetric pullback, which forms a flag. When the resistance line is broken in the flag, it signals the next phase of the stock's move and the security moves up.

The bull flag shows a huge price move that reaches its peak and then moves back into an orderly behavior where the high and low levels are parallel to each other. Bull flags are initially characterized by tremendous momentum as the bulls break out of the trend and leave the bears behind.

The bull flag intraday trading strategy requires a lot of patience for the formation of the flag, and then the upper and lower trend lines. Then two places are marked to enter the trade, one on the break of the flag and the other on the break of the high level. 

Furthermore, stop-loss levels are usually marked at the bottom of the uptrend. To find the target price in a bull flag pattern, various technical indicators such as Bollinger Bands or the Stochastic Oscillator are used.

Conclusion :

There are many intraday trading books for a deep understanding of all these intraday trading strategies, by studying which you can take a right position in the market. But using the right strategy at the right time is the key to success.

Only 4.5% of intraday traders are successful and it is they who not only understand and implement the best intraday strategy but do it at the right time with the right dedication and flexibility. Intraday strategies should be tried and tested first and then implemented to make profits.

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