An inherent feature of intraday trading is that it’s risky because you will be dealing directly with the stock market. However, successful day traders sharpen their ability to take calculated risks based on real market conditions while relying on advanced tools and techniques provided by online intraday trading platforms.
Published on 12 January 2022
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As a newcomer, intraday trading online might seem like an excellent source of earning higher returns, but only those who have an appetite for risk, an understanding of the market, and the time to make daily trade decisions tend to find success in this arena. To help you get rolling, we have compiled a friendly intraday trading guide for beginners to follow.
What is Online Intraday Trading?
To understand what intraday trading is, we simply need to break down the term — “intra” means “inside” or “within”, implying trades taking place within a day. When stocks and ETFs (Exchange-Traded Funds) are bought and sold during regular market hours, with all positions settled by the end of the day, it’s called intraday trading.
The fundamental principles that day traders need to follow depend on whether the stocks are more likely to move up or down. In the case of the former, you buy low, sell high, while for the latter, you short-sell. Also Read: Open High Low Strategy
How to Do Intraday Trading?
Before you start intraday trading in India, there’s a major prerequisite that you cannot overlook: opening a Demat and a trading account. A Demat account is used to hold and keep track of all your securities in one place, whereas a trading account is necessary for conducting the actual exchange. It also helps you assess gross profits and losses, evaluates the performance of a specific stock across several years, and serves as a safety net against possible losses. Therefore, if you want to figure out how to do intraday trading, opening a trading account is the first step.
Intraday Trading Guide for Beginners
Those who are commencing their intraday trading online journey should start out by implementing simple approaches and indicators lest they too feel overwhelmed.
To help you make a very seamless transition into the fast-paced world of online intraday trading, here’s a brief intraday trading guide for beginners:
Time Your Entry and Exit
Intraday trading often works on the basis of trends in different sectors. When you’re starting out, it’s wise to follow the trends as it gives you a chance to minimize your losses. The most important aspect here is to recognize the patterns and devise helpful entry and stop-loss techniques. You can decide the exit strategy based on two conditions: the target profit or the maximum loss limit.
Keep Emotions at Bay
Greed, fear, and impulse are a few emotions that can force you to get carried away and make a wrong call. Similarly, not finding success at the get-go can discourage a lot of beginner traders and send them down a path of impulsive decision-making. When it comes to intraday trading, you should always focus on reality and ignore your emotions or biases. Factors like historical analysis, market trends, and trading charts are far more telling than what your gut might be saying.
Mark Your Funds
It’s never a good idea to start trading without first setting aside a specific capital you’re willing to trade. It can be any amount that you can afford to lose, not that you necessarily will. Most successful traders risk a fraction of less than 1-2% of their trading account on each trade, which helps them set a stop-loss limit.
Start with 1 or 2 Stocks
While the urge to dive knee-deep into multiple stocks at once might be strong when you begin, it’s better to start slow and build volume with time. This allows you to learn from each trade and avoid any mistakes in the next one. As you succeed small, your confidence will grow, as will your risk appetite.
Build Your Knowledge Base
Not only should you keep yourself abreast of basic intraday trading procedures, but you also need to keep up with the latest updates in the stock market. Any events that might affect prices should be on your radar, from interest rate plans to company-related events. When it comes to everyday preparation, be sure to scan financial websites and read reliable opinions that help you formulate your own strategy.
Conclusion
Intraday trading online is a high-stress environment that requires timely decisions. This guide is merely a jumping-off point that will help you develop an aptitude for trading and keep losses to a minimum. Make sure you do your homework, stay calm, and prepare well before you start.
Team Espresso
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Intraday trading involves more risk compared to the regular stock market. Thus, if you want to avoid making losses, you must understand the basics of the concept. Traders must only invest the amount they are comfortable in losing to avoid financial disasters.
Intraday trading involves more risk compared to the regular stock market. Thus, if you want to avoid making losses, you must understand the basics of the concept. Traders must only invest the amount they are comfortable in losing to avoid financial disasters.
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