Basics of Intraday Trading Strategies

Day Trading is basically an act of buying & selling shares of a Firm, Institution or a Group within the same day OR in a multiple no. of times that supposed to be squared off during the course of day (squared off: if a share is bought will have to short it by the end of days closure i.e. 3:15 PM IST & vice versa is the case with selling).

Basic Things to keep in my Mind (Tips):-

Risk Management

The very first case that arrives is newbie’s or anyone who doesn’t have a well designed strategy will come to lose his/her hard earned money in no time.

Avoid! Avoid! Such mistakes Plan properly & then execute.

Stop Loss / Limit Order

People often forget to add stop loss while doing day trades, as you’re risking your money on a single trade which in my opinion should never exceed 2% of your trading balance in any case. So, make it a habit to add stop loss each time you’re doing Intraday.

Limit orders help you trade with more precision & cut losses, wherein you set your price (not unrealistic but executable) for buying as well as selling.

No. of Trades

In a single day mark only 2-3 trades as your favorites, play safely don’t overtrade. You may lose more than you’ve earned.

Example:-

Case 1 – Suppose I took 100 shares which costs 100/- each, so in this scenario I have invested 10,000/- + broker charges which add up to 500 making it 10,500 for single trade.

In case I go for 3 trades in that day would have played for 31500.

Assuming I Lose on all three @ 2% as denoted earlier will have lost 630 + brokerage = 650/- (approx.) which I think one can easily bear & will cover with proper strategies.

Case 2 – In case I have gone for 6 trades in that day would have played for 63000/- & my losses would have been 1260 + brokerage = 1300/- (approx.).

As clearly mentioned one can see the difference.

So start small, convert them slowly in a well designed way to bigger outputs.

Penny Stock

All of us even me being one of them who’s every single time looking for deals with low prices. I strictly suggest avoiding them. These stocks often become delisted from the exchange or may lead to loss, until & unless you see a real opportunity as per your researches.

Recently on 20.06.2019 shares of Jet Airways have risen drastically from a face value of 17.5 to 73 INR only at the time of closing of the market that may have yielded good results.

*Ending Herewith an Important note: Don’t let your emotions abandon your strategies.