As a trader, you should know the tips and tricks about it, there are some tips regarding Intraday Trading, which are as follows:
- Trade in liquid stocks that improves the probability of the quick trade execution
- Filter stocks based on a percentage
- Look for stocks that group market trends.
- Classify the stocks as strong or weak as per the correlation with the market.
To succeed in the Intraday, you must identify the stocks and ETFs that you can monitor and analyze the trading trends.
[toc]
Selection Strategy of Intraday Stocks
Liquid Stocks:
These stocks are the stocks that have a large volume in trading throughout the day. It is the most important criterion for choosing the stocks in the trade.
You can buy and sell a large volume without disturbing the trends you want benefits.
The trades have to align with your potential to make the trading quickly on the precise time and avoid delay in the execution.
Medium to Hiigh Volatility
In this trading, the price movement depends on daily. As you are trading stocks with a sticky price, you will not get the time for trading. Thus you can filter the stocks based on the percentage term in rupee as the filtration set on the stocks, then choose the stocks that move at least 3% per day on average.
Follow Indicators
If you want to get into the intraday market deeply and succeed, then you must be able to predict the price of the short-term movement correctly. In this, you have to improve your chances of success and choose the stocks that trend in a group with the indicators. If you want to trade in the stock of the IT sector, then you should have a strong correlation with the INR vs US$.
Trade with Trends
Some traders specialize their trading in intraday with trends. As a trader, one has to identify the stock market wave in the market and then should decide to conduct the trading time analysis.
Strong Stocks vs Weak Stocks
Strong stocks are the ones that move in the same direction as the market move but with more intensity. For example, if the market rises by 2%, the stock market will rise by 3-4%.
Weak stocks are the ones that tend to rise or fall at a slower pace than the market move. Experts generally prefer strong stocks in uptrends and weak stocks in downtrends to lower the potential for loss.
But it is better to avoid the weak stock in the market because stock markets are always trending.
Tips for picking the Right Stocks
- Volume Traded
- Trending Stock
- Recent Analysis
- Breakout stocks
- Gainers and Losers
- Monitor select stocks
Volume traded: As the total number of shares are traded within a particular time frame, this volume is sold and bought. Hence traders should pick up the stocks in high trade volume.
Trending stock: This stock trader can get momentum in one direction or another with good trading volumes.
Recent Analysis: This stock has been shortlisted in the last week or two. Here assets are likely to have movement for the day before placing to buy or sell order.
Breakout stocks: The resistance level price is beyond the stock, which is expected to rise, and the support level is the price beyond which a stock falls.
Gainers and Lossers: Most brokers will get the result in gain and loss in the day; you should track the movement of the stocks in an intraday position.
Monitor Select Stocks: Thousands of stocks are traded on the stock exchange. The day traders cannot possibly keep them all. That is the reason why you want the shortlist of the stocks.
Frequently Asked Question
How Liquid is the Stock?
In trading, the stock is liquid enough. If not trading in large volume, squaring off the trade market close could be tough. There is an issue that may arise in small-cap and micro-cap stocks.
Liquidity = Average daily volumes traded / Market Capitalisation.
What is the impact cost like?
When you buy or sell larger orders than is placed in the stocks, which effect the stock price, such stock has a high cost; day trader should avoid such stocks.
