One of the most riskiest, yet profitable methods of stock trading is day trading. Also known as intraday trading, day trading involves purchasing and selling stocks within a single trading session. If you’re interested in utilizing this strategy to make money from the stock market, then here are some basic intraday trading tips that you can use.
1. Pick the right stocks
The first and foremost thing that you should do when getting into day trading is selecting the right stock to buy. Not all stocks are good contenders for intraday trading. Since you would be buying and selling them within a trading session, you would need to choose stocks with high amounts of liquidity, which will make purchasing and selling that much easier. Large cap stocks and mid cap stocks are the best bet for day trading since they usually have high liquidity.
2. Set target prices for entry and exit
Once you’ve chosen the stock that you wish to trade in, the next step is to set target prices for both entry and exit. Going into a trade blindly without any targets is a recipe for disaster. Set a price at which you would like to buy the stock and stick to it, even if it means that you may not get a chance to buy the stock. Similarly, set a target at which you would like to sell the stock, even if it means that you might miss out on any further gains that the stock may or may not make.
2. Don’t forget to set stop loss
The first thing that you should do right after purchasing the stock is to set a stop loss. This will allow you to prevent any significant losses if the stock were to move against your expectations. For instance, let’s say that you buy a stock at Rs. 500, expecting it to go up. However, you place a stop loss at Rs. 490 as a safety net. Now, if the stock goes against your expectations and drops to Rs. 490, the stop loss will get triggered and your stock will be sold at a loss of Rs. 10. And you will be protected from any further downsides in the price as well.
3. Always go with the trend
This is one of the best intraday trading tips that you can follow. If the market trend is bullish, it is advisable to buy stocks. And if it is negative, it is advisable to short-sell stocks. It is never a good idea to hold a contrarian view of the market since it can backfire. For instance, many individuals short-sell stocks when the market is bullish expecting a reversal of the price. Such reversals happen rarely and few and far between.
Conclusion
Despite intraday trading being riskier than regular trading, it can be one of the most profitable strategies when done right. That said, to be able to partake in day trading, possessing a trading and demat account is absolutely essential. Get in touch with Motilal Oswal right away to open a demat account online and get started on your stock trading journey.
Trending Blogs: Invest in Small Cap & Mid Cap Mutual Fund & Stocks | US FED’s rate cut announcements | Companies affected by Rise in Crude Oil Price | Fall in IT Stocks | Launch of 4 New Indices | Revised Lot Sie of Nifty Contracts | RBI Monetary Policy Committee Meet 2024 | ITC Share Surge After BATs Block Deal
Related Articles: Want to Open a Demat Account? Here's What You Should Know | Factors to Keep in Mind While Opening a Demat account
Popular Stocks: ONGC Share Price | SBI Life Share Price | UPL Share Price | TCS Share Price | Titan Share Price