If you’ve been in the stock market for quite some time now and wish to try new trading techniques, then intraday trading is something that you should take up. Although a little riskier than the more traditional buy now, sell later approach that you’re probably familiar with, intraday trading can provide you with some really handsome returns if the trades go your way. That said, here are some profitable intraday trading strategies that you should definitely try.
1. Market Trend Strategy
Market Trend strategy is one of the most used intraday trading strategies. It is also quite simple and easy to understand as well. The strategy basically involves following the current market trend. For instance, if the market trend is currently bullish, you buy stocks. And if it is bearish, you short-sell stocks. The chances of going wrong with this day trading strategy is very minimal. The only thing that you should focus on is getting the market trend right.
2. Trend Reversal Strategy
Now this is one of the more riskier trading strategies around. However, the potential reward that you can earn is also naturally higher. The trend reversal strategy involves taking up a position that’s contrary to what the current market trend suggests, in the hope of the trend reversing shortly. For instance, say that the current market trend is bullish, you short-sell a stock and wait for the trend to reverse. Now, when the trend actually reverses, you get to make huge profits.
3. Breakout Strategy
The breakout strategy is another one of the profitable trading strategies that you can employ. This involves identifying the breakout points for a stock and placing a corresponding buy or sell order. A breakout happens when the price of a stock breaks its support or resistance levels. Let’s say that a stock breaks out of its resistance level, you immediately place a buy order for the stock and sell the stock once you reach your target. It is as simple as that. However, you need to get your resistance levels, support levels, and breakout points right in order to be able to make profits on your trades.
4. Gap and Go Strategy
Sometimes, due to favourable or unfavourable news, stocks may face a gap up opening or a gap down opening. A gap up opening happens when the stock opens at a price that’s much higher than its previous day’s close. And a gap down opening happens when the stock opens at a price that’s far lower than its previous day’s close. Now, in the gap and go strategy, you would have to take a contrarian position on the stock. What this means is that you would have to short-sell the stock in the case of a gap up opening and buy the stock in the case of a gap down opening. This is done in the hopes of the stock closing this gap by the end of the day, generating profit.
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Conclusion
Now that you’ve seen a few profitable intraday trading strategies, go ahead and try them out yourself. That said, it is a good idea to start off slow till you get the hang of the strategy. If you don’t already have a demat and trading account to start intraday trading, remember to get in touch with Motilal Oswal to open one right away.