Creating an Efficient Intraday Trading Strategy| Espresso

Creating an Efficient Intraday Trading Strategy

Intraday trading means buying and selling the stocks on the same day. Intraday trading is all about precise timing and market understanding. A good intraday trading strategy works only after technical analysis, practical execution and using efficient indicators for proper risk management. It is also referred to as "Day Trading". Share prices fluctuate throughout the day and traders try to draw profits from these fluctuations by buying and selling the shares on the same day before the market closes. You can notice these fluctuations through an app for intraday trading.

Published on 30 January 2024

For instance, suppose the stock starts trading in the morning at Rs 1100. It quickly rises to 1150 in about an hour or two. You would have made Rs 50,000 if you had purchased 1000 shares in the morning and sold them for 1150. We refer to this as intraday trading.

Best Intraday Trading Strategies

Even if someone masters the intraday trading strategy, earning the monetary reward is difficult and is possible only if you have patience and discipline. The market is contingent because of the daily volatility. Below are the strategies for intraday trading:

Moving Average Crossover Strategy

A moving average crossover happens when two separate moving average lines cross over each other. It is a lagging indication that helps you determine when to enter and exit. It can assist you in determining the beginning, middle, and end of a trend as well as its overall trajectory.

If the moving averages cross over one another, it may indicate that a shift in trend is imminent, which might present an opportunity for a better entry.

A crossover method does not perform as well when prices are ranging, Though, it performs well in a volatile and/or trending market. The moving average crossover method offers specific triggers for potential entry and exit points.

Reversal Trading Strategy

Reversal trading is also known as pullback trading which includes placing bets on stocks that defy market trends in the hopes that they would experience a "reversal” in future. Traders that use the reversal trading strategies seek out equities that are trading at extreme highs and lows as they depict a decent chance of a reversing course. When the movement of the security reverses, traders set a stop and wait for the securities to reach their maximum volatility. The trader commences the trade when the reverse value reaches the trader's projected limit.

A reversal in trading is a shift in the price of an asset's direction. Both day traders and long-term investors utilize the reversal trading strategy to decide whether to enter or quit a market.

They use technical indicators like moving average (MA) and moving average convergence divergence (MACD) to help them separate and spot reversals in the market.

Momentum Trading Strategy:

The momentum trading method opens positions based on the strength of market fluctuations. Approximately 25–35% of equities exhibit volatility. This change is referred to as momentum. It is predicated on the assumption that if a price movement is strong enough, it will continue in the same direction. When an item achieves a greater price, it generally gets more attention from traders and investors, driving up the market price even more. This goes on until a lot of sellers enter the market, as when they decide to lower the asset's price due to an unanticipated circumstance. 

These equities have a tendency to rise above the Moving Average in large volumes with little or no resistance. Earnings might act as a stimulus to build momentum in the markets, but momentum can also develop in the absence of underlying support. This is known as a technical breakout. When using the momentum trading method, traders want to acquire stocks that move in large volumes in one direction. With the momentum trading approach, the profit to loss ratio is 2:1.

Depending on how quickly the stocks change, a trader may hold the equities for minutes, days, or even hours. The momentum approach performs well during early trading hours or when volume is strong. 

Gap and Go Trading Strategy

When there is a gap up, the stock price opens higher than it did at the previous close. On the other hand, a gap down indicates that the stock price opens below the previous close.

Gapers are the main target of this intraday trading approach. Gapers are the places on a stock chart where no trades are performed. These gaps can be caused by a variety of events, including a news surge, release of earnings, or a trader's modified trading approach.

The gap and go method is applied when a stock opens higher than its closing price from the prior day. The most popular method for successfully engaging in gap trading is to employ the best intraday trading app in India to find equities with premarket volume.


With intraday trading strategies and the best app for intraday trading, beginners can initiate the trading process with confidence. Regular routine can help to expert the strategies before commencing any trade. Putting stop-loss is advantageous to prevent losses. Traders must find out their trading style that suits their requirements and temperament

Chandresh Khona
Team Espresso

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