The stock market is one of the major sources of income for many people. The people who try to earn money on a daily basis through the stock market are known as intraday traders. They make a living out of regular purchasing and selling of stocks. In this article, you will the basic concepts of intraday trading and how to do it.
First, let us understand the meaning of intraday trading.
What is Intraday Trading?
When an individual purchase and sell stocks on the same day, it is known as intraday trading. The whole purpose of intraday trading is to purchase the stock at a lower price and sell it at a higher price or vice versa. Squaring off the transaction on the same day of the trade is the primary requirement for intraday trading.
One of the important questions that every trader faces in intraday trading is which stock to select for intraday trading. In this segment of the article, you will learn about how to do intraday trading.
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How to do Intraday Trading?
You must keep the following points in mind before doing intraday trading.
- Firstly, select stocks only after understanding their technical chart pattern. This is because the chart suggests the future price movement of any stock. If the chart reading is done rightly, you can make good profits by taking a correct position in that stock.
- Secondly, select only those stocks to trade that are liquid in nature. This means that trade in only those stocks that have high volume. This is because your purpose is intraday trading i.e. squaring of the transaction on the same day. It is possible only if you get a sufficient number of buyers or sellers at the end of the day to execute your transaction.
- Before indulging in intraday trading you must know the resistance levels of any stock you want to trade. The resistance level is the price beyond which stock is not able to rise. As an intraday trader, you must look at the price level of the stocks that cross the resistance level, such stocks have good potential to move upwards.
- An intraday trader must look to trade in the stocks that have some related news to them. Such stocks tend to show volatile moves and the trader can take advantage of such price movement. You can trade in such stocks after doing the basic analysis.
- Check out the week’s movement in the stock price. Such analysis helps in picking up the right stock as you can understand the trend of the stock. This will help you in taking the right intraday trade.
- Always keep a stop-loss during an intraday trade. Stop loss will help you in limiting the loss. A disciplined intraday trader always puts a stop loss in place.
The above are the basic points that every intraday trader must follow. By following them one can make handsome returns with lesser risk.
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About Us
NTA® is the leader in providing stock market education to intraday traders. With our help and expertise, intraday traders can learn to read the technical charts of the stocks. The proper understanding of the technical charts helps the intraday traders to take the right position and make higher profits in the stock market. Stock market education will help you not only to become a successful intraday trader but also to become a successful investor. All you need to do is join our academy. If you want any further information or have a query you can contact us via email or call us on phone. We will be glad to serve you.
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