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Is intraday trading too unpredictable or can technical analysis help

Intraday trading is one of the many strategies that individuals employ in the world of stock trading. Although it can be profitable, it is widely considered to be risky due to the unpredictable nature of stock prices. 

However, many traders feel that techniques like technical analysis can help reduce the level of risk involved with day trading and make it more profitable. In this article, we’re going to be taking a look at whether technical analysis can help make intraday trading easier or whether intraday trading is something that’s unpredictable. 

What is intraday trading?

Before we take a more in depth look, let’s first see what intraday trading is all about. Intraday trading is a strategy or a method of trading where individuals buy and sell stocks on the same trading session or day. 

For instance, let’s say that you buy 100 shares of Tata Motors on 12th April, 2022. If you sell the shares that you bought on the same day, i.e. 12th April, 2022, then this trade that you made will be termed as an intraday trade. 

Is intraday trading unpredictable?

But why do many traders feel that intraday trading is unpredictable? One of the reasons for that has to be the fact that stock prices in the ultra-short term and short-term very rarely move in accordance with fundamental reasons. 

Usually, the driving factors behind the stock prices in the ultra-short term are emotional in nature. For instance, if traders get wind of a bit of negative news about a company, the share prices are likely to react accordingly despite the entity being financially very stable. 

And when you buy and sell shares within the same day, the time frame is so small that it seems like intraday trading is unpredictable in nature.

Can technical analysis help with intraday trading?

Although intraday trading can be unpredictable at times, it is not always so. Techniques like technical analysis can be quite helpful when it comes to predicting the movement of the stock market. 

One of the many technical analysis techniques that traders use to get an advantage is candlestick pattern analysis. Candlestick patterns can help you forecast the future price movement of a stock or an index to a relatively high degree.

There are also other indicators like Moving Average Convergence and Divergence (MACD), Relative Strength Index (RSI), and Stochastic Oscillator, among others, that analyze both price and volume data of stocks and indexes to give you a better idea of how the market is likely to react in the near future. 

Using a multitude of techniques such as the ones mentioned above, many traders have found significant success when it comes to intraday trading. Not only have they been able to reduce their risk to a large degree, they’ve also been able to increase their profits too. 


So there you have it. Intraday trading can be unpredictable for short periods of time during major domestic and international events, but with the proper implementation of technical analysis traders can still earn profits. 

That said, to be able to partake in intraday trading, it is absolutely crucial for you to possess a trading and demat account. Visit Motilal Oswal right now to open a demat account online for free if you don’t already have one. 

Related Articles: How to Decide Whether a Stock is Fit for Intraday Trading | 7 Reasons why Intraday Traders often Lose Money in Stock Markets | Best Intraday Trading Tips and Strategy | 20 Things you Need to Remember when you Trade Intraday | Successful Intraday Trading Strategies | Upcoming IPO | LIC IPO

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