Intraday trading tips for beginners
Have you ever dreamed of making quick profits in the stock market? Intraday trading could be your ticket to financial success, but it is not for the faint of heart. As a beginner, you should learn about intraday trading tips for beginners. 🎢
That’s why we’ve compiled the top 10 intraday trading tips for beginners that every beginner needs to know. From creating a bulletproof trading plan to knowing when to stop, we’ll cover everything you need to know to set yourself up for success. So, are you ready to go from a novice trader to a savvy market player? Let’s dive into these game-changing rules that will help you navigate the exciting world of intraday trading!
What is Intraday trading:-
The meaning of intraday trading is “within the day.” Thus it refers to the trading activity that is carried out by an individual during the market hours in a day. Intraday trading means looking for names that can either go up or down. If a stock is likely to go up, a trader buys at a lower price and sells at a higher price.
On the other hand, if a stock is expected to go down, the trader tends to short sell, which means selling at a higher price and buying at a lower price. Needless to say, intraday trading requires you to have a deep understanding of how the market might behave and act accordingly.
Master these key points:–
- Day trading is profitable in the long run only if traders take it seriously and do thorough research.
- Day traders often look at liquidity, volatility, and volume when deciding whether to buy a stock.
- Interactive Brokers and Webull are two recommended online brokers for day traders.
- Some of the tools that day traders use to determine buy points include candlestick chart patterns, trend lines and triangles, and volume.
- Day traders must be hardworking, focused, objective and non-emotional in their work.
- Traders should master their psychology level.
Intraday Trading V/S Regular Trading
Before knowing about intraday trading tips for beginners you must know the difference between intraday trading and regular trading. One of the primary differences between intraday trades and regular trades is taking delivery of the stock. In intraday, the trader has to close the position on the same day before the market closes, regardless of the profit or loss.
Whereas in regular trading, the trader can choose to stay invested for a certain period, and thus, the trade gets settled on a few days, depending on the category of scrip.
Moreover, there is no change in the ownership of the shares in intraday trading, whereas in case of delivery the ownership of the shares changes and the rights are transferred from the seller to the buyer. After settlement the shares are deposited in the demat account.
Beginners often struggle in selecting the right type of instruments to execute trades and thus end up incurring losses. Here I am suggesting you to trade on the Dhan trading platform. They give the amazing scalping mode also and the charges are also very low.
Now let’s have a look into the top 10 intraday trading tips for beginners.
Intraday trading tips for beginners
- Take knowledge first
First intraday trading tips for beginners is before you start trading, you should learn about trading. This is a very important step before starting trading, otherwise you will have to face losses in the market.
Do research about trading, what are the strategies of trading, and then try paper trading and only after that do real trading.
- Start with small capital
A few good trades might have boosted your confidence, but it is still too early. The most important intraday trading tips for beginners is Don’t be too aggressive with your bets in the initial stage. Focus on a maximum of 1-2 stocks initially and trade with minimum quantity. Over time, the volume and value should increase.
Starting with small capital will give you the opportunity to make mistakes and increase your familiarity with how the market works so that you don’t make the same mistakes again. Gradually increase the trade volume as your experience and risk appetite grow.
- Make your own trading strategy
There are many trading strategies in the market. But it is not necessary that every strategy works for you. You should analyze for a few days which strategy is working for you. Then you can backtest that strategy again and again which will give you an idea of its accuracy level. If that strategy works then you can use it in the market.
You can also create a strategy by following different types of indicators, chart patterns, candlestick patterns, and basic price action.
If you want to know more about trading strategies you must have a look 5 best option trading strategies every investor should know
- Choose stocks
One of the most important intraday trading tips for beginners is do not look towards option trading. First analyze some stocks and trade in them, if you are able to make 2-3% profit every month in stocks then only you can move towards options.
Remember, to become a better trader it is important that you stay in the market.
- Pre and post market analysis
While doing pre market analysis you have to see which levels are emerging. You should mark the demand and supply zone. This is one of the most effective intraday trading tips for beginners.
You should also watch the global market and also take a look at the market news.
While doing post market analysis, you should make a journal of the trades you took today. You should see what mistakes you made today and what you could have done better.
- Enter and Exit
A great idea is to trade with the prevailing intraday trend. This offers the possibility of low-risk entry points, while providing a high probability of profit if the trend continues. Identifying such patterns helps in finding useful entry and stop-loss strategies.
To identify when to exit, you can look at two situations; when you have reached the target profit or when you have reached the maximum loss limit below which you do not want to go. Once you have reached your desired profit level, you can consider exiting.
- Stop Loss Always
A corollary of the first point, always place a stop loss. Placing a stop loss is a kind of exit strategy in case your trend or expectation does not come true.
On the other hand, if your expectation comes true, you must know how to place different target levels – T1, T2, etc. so that you keep exiting at different price points.
- Master your psychology
An important intraday trading tips for beginners is that you have to master your psychology. Forget about your previous losses while taking the next trade. Don’t try to take revenge from the market for your losses, otherwise you will lose your money again and again. To master your trading psychology you can read the book “ Trading in the zone” by Mark Douglas.
Successful traders have to move fast, but they don’t have to think fast. Why? Because they have already developed a trading strategy, as well as the discipline to stick to it. It’s important to follow your formula and methodology closely rather than trying to chase profits. Don’t let your emotions take over and force you to abandon your strategy. Remember the mantra of day traders: plan your trades and trade according to your plan.
- Choose a time frame
One Of the important intraday trading tips for beginners is to choose a time frame and trade only at that time. Day trading requires your time and attention. In fact, you will need to devote most of your day. If you have limited time, don’t consider it.
Day trading requires a trader to keep an eye on the markets and spot opportunities that arise at any time during trading hours. It is important to be aware and move quickly.
- Maintain discipline.
One Of the important intraday trading tips for beginners is Adapting to changing conditions does not mean changing your stop-loss and stop-limit settings or other trading criteria, because you take on more risk. Successful day trading relies heavily on discipline and emotional control. Stick to your trading plan; don’t let emotions cloud your decisions. This is a quick road to ruin.
Intraday trading for beginners
Now that you have some knowledge about day trading, let’s review some key techniques that new day traders can use.
Once you’ve mastered these techniques, developed your own trading style, and determined your end goals, you can use several strategies to help you seek profits:
- Uptrends and downtrends
Anyone who follows the trend will buy long when prices rise or short sell when they fall. This is done on the assumption that prices that are rising or falling will continue to do so.
- Scalping
This is a style by which a speculator takes advantage of the small price gaps created by the bid-ask spread. This technique involves quickly entering and exiting a position, usually within minutes or seconds.
- News Trading
Investors using this strategy will buy long when good news arrives or short sell when bad news arrives. This can lead to greater volatility, which can lead to greater profits or losses.
The bottom line
Intra-day is not very easy and this guide should only be used as a starting point to delve deeper into this trading type. It is also important to note that this type of trading is not suitable for all stock market traders or investors.
Read more about this trading to see if it aligns with your financial objectives and risk appetite. If you want to explore intra-day trading, start with a small trade volume to protect yourself from market risks, also make sure your technical analysis basics are strong so that you can make sensible buy and sell decisions.
However, if you want to profit from the stock market, you can start investing instead of trading. Stock investing involves evaluating stocks based on fundamentals and then maintaining your investments for the long term. This way you don’t have to constantly monitor the market and keep track of the timing and it can save you a lot of anxiety as well as potential capital loss.
In any case, whichever strategy you choose, make sure you enter the stock markets well prepared, fully aware of the risks and stay calm and composed.
