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Intra-day Trading Made Easy – Pick The Right Stocks By Following These 4 Strategies
The field of intra-day trading is intriguing to say the least. Traders enter this market with the hopes of turning a profit within hours of investment. The idea is to earn a profit in the shortest possible time, within the trading hours. New traders contemplating intra-day trading are often confused about how to choose stocks for intraday trading so that profits can be earned. Well the good news is that, you can pick the right stock to invest in, simply by exercising a few strategies. Here are top 4 strategies to make intra-day trading easy for you.
• Strategy 1 – Research about the stocks you wish to invest in
One of the most important things to know about intra-day trading is that your investment will fail if you do not have adequate research to back the stocks you’ve picked. As an investor, it is your responsibility to identity indices, and to find appropriate sectors worth investment, as per your risk appetites. Research about the various sectors, choose the stocks and conduct day trading technical analysis before investing. Through technical analysis you can determine support/resistance levels and get a detailed review of the fundamentals of all the stock you’ve picked.
• Strategy 2 – Try to invest only in liquid stocks
The reason why new investors should invest only in liquid stocks is that these stocks generally come with high trading volumes. When you trade in a liquid stick, you can easily buy and sell larger quantities/volumes of your chosen stock. Another advantage is that the price of the liquid stock isn’t affected. While liquid stocks are typically considered volatile, intra-day trading statistics in the past are proof that volatile stocks generally show greater (upward) movements in shorter periods of time.
• Strategy 3 – Think like a trader, not like an investor
Although intra-day trading is all about making money in a short span of time, it is essential that you don’t allow money to be your sole point of concentration. As such, you must think like a trader, and not an investor in the share market, where you turn profits after a specific period of investment. Intra-day trading happens in real-time, which means you can lose money if you are always scared of trading or if you get greedy and decide to stay invested for longer than necessary. Remember, the magic word in this type of trades is ‘trading’ not ‘investing’. You need to know when to exit the market, instead of risking your entire investment.
• Strategy 4 – Check the ownership pattern of the stock you wish to invest in
It is extremely crucial that you check the ownership pattern of the stock you wish to invest in. You can find the details pertaining to ownership patterns on the websites of the company offering the stocks. Also look at the intraday trading indicators while checking the ownership pattern. A detailed look at the stock’s trading patterns and indicators will help you determine whether the stock is worth investing in or not. A widely owned stock is typically less volatile than one that is not owned widely by investors. Also, market operators can easily corner such stocks and they can hit circuit filters very easily if they are not widely traded.
Final word: Now that you know how to pick stocks for day trading in India, you can begin day-trading. Remember that it is important to start slowly and to increase your risk appetite gradually, after you’ve understood the nitty-gritties of day trading. If you continue to invest strategically and systematically, there is no reason why you cannot create a corpus through intra-day trading.
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