Top Intraday Trading Tips and Ideas for New Investors

Intraday trading is a dynamic process which involves buying and selling of financial instruments, sometimes multiple times in a day, with the aim to earn profits. Participants of the trade, over time, come up with intraday trading ideas that mostly work in their favour and result in gains while engaging in intraday trading. As a beginner in the intraday trading sphere, you may want to spend time reading up on these intraday trading tips.

Tips over Research?

While skimming through intraday tips for beginners is great, it cannot be your only guiding force toward intraday trading. Intraday trading tips can be thought of as a subset to your overall research while indulging in intraday trading. Solid research, understanding of the stock market and being aware of your own risk and capital constraints is what will ultimately lead you to cracking profits in intraday trading.

Tips & Ideas

Intraday trading is not everyone’s cup of tea. Due to the high volume of transactions, and urgency to square off your trading positions within the same trading day, intraday trading can be successfully undertaken only by those who are ready to deep dive and learn the intricacies of the trade. Some of the top intraday tips for beginners are as follows -

• Begin Small: 

  As a beginner in the intraday trading domain, you may get excited at the prospect of making daily profits and invest a lot of capital into the trade. This sentiment will be further intensified if your initial trades are successful, and you do actually crack good sums of profits. However, don’t get lured into thinking that your trade position will always end up in profits. If you were to risk and invest a higher capital into the market, and it plays against your favour, the losses could be significant. You should always tip toe into intraday trading only a portion of your surplus funds. Risk only a specific portion of your surplus funds so that you can limit the maximum losses that you may encounter on the way.

• Timing Trades: 

  Another useful intraday trading tip is to time the market and know when it is the best time to place a trade. Considering day trades are concluded within the same trading day, monitoring the market is of utmost importance. A useful intraday trading tip for beginners is avoiding making transactions in the opening and closing market hours. When the market opens, the initial time should be spent in understanding how it is operating and getting a sense of the market’s pulse before taking a trade position. Toward the closing hours of the market, there are bound to be opportunities to square off your positions profitably, but it will also be a volatile time. As a beginner, you may want to restrict yourself to the middle hours of the market where volatility is not as high and there are opportunities available to make profits too.

• Liquidity: 

  When you are engaged in intraday trading, half the battle is won if you choose the right stocks to trade in. Considering trades are squared off within the day, it is crucial that you rely on those stocks who are liquid in nature. Simply put, rely on those stocks which are easy to transact and have demand in the market. Another point to remember here is that the stock in question should be liquid at varying price levels.

• Decide on the Stop-Loss: 

  Setting a stop- loss level is a must for your intraday trading journey. A stop-loss implies setting a price level which is the minimum possible amount to which you will allow your purchased stock to fall, before you sell it off. 

• Profit Booking: 

  The existence of margin calling, which allows intraday traders to enjoy leveraged trades, amplifies the profits. However, you should not get greedy in the process and continue to risk your investment even when your targeted profit amount has been reached. This is because leveraged trades can cause significant pressure, if the market works against your favour and results in losses. Hence, decide on your targeted profit level beforehand and book your profits to exit the market, once the target has been achieved.

Tips and ideas can only take you so far in your intraday trading endeavours. While you should keep these handy, nothing would guide you better than solid research work and facts.

Disclaimer

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.