Top 12 Tips and Tricks for Intraday Traders

6 min read • Published 28 February 2023
Written by Pavan Karthik

Intraday trading can be a tricky affair the first time you try it. There are various things you need to know to conduct successful trades. Knowing certain tips and tricks helps grasp the challenges this trading method poses.

Keep reading to know more.

Top 12 Tips and Tricks for Intraday Trading

Here are some of the top tips and tricks that you can follow for intraday trading:

  1. Choose the Right Stocks

You need to choose the right stocks to conduct trades via intraday trading.They should have high liquidity allowing you to exit your position easily.

Also, it is suggested that you avoid stocks with high volatility. Now, it is a fact that intraday trading depends on the volatility of stock value.

Furthermore, you can choose stocks that correlate with the major market indices. Doing so lets you get a clear idea of the market trends and plan your trades accordingly.

  1. Research on the Company Fundamentals

While technical analysis is more important in intraday trading, you should also research the company fundamentals before trading. For example, it is crucial to know the dividend payment date of a share as there might be a significant change in the share price on the day.

  1. Time the Market Correctly

In intraday trading, timing the market correctly is crucial for making profits. You can do this by conducting a time analysis on the daily charts. This will give you a deep insight into the price movement of a particular stock throughout the day and help you take better trading decisions. 

  1. Take the Help of Intraday Trading Indicators

Intraday indicators are overlays on charts that you can use to keep track of market trends. They use mathematical calculations to indicate future price movements and can be handy for maximising your gains. 

Some of the top indicators used by intraday traders are moving averages, Relative Strength Index (RSI), Bollinger bands, Commodity Channel Index and stochastic oscillator. 

  1. Set the Entry and Exit Prices

After choosing the appropriate stocks, it is advisable that you set the entry and exit prices. This means you must have a clear idea of your target stock’s buying and selling price and stick to it stringently. 

  1. Remember to Close Your Open Positions

Another important tip that you must remember while intraday trading is to close all your open positions before trading ends for the day. This means that even if the stocks do not reach your target closing price, you need to sell them off to square off your position. 

Some intraday traders tend to take the delivery of their stocks when they do not reach their target price. This practice is not recommended as the stocks bought in intraday trading might not give desirable results the next day. Furthermore, it makes the trader susceptible to overnight risks. 

  1. Set Stop-Loss Orders

When placing intraday orders, it is wise to set a stop-loss order on your trades. You can set an advanced order via your brokerage firm to sell off your holdings after they reach a specific price. Doing so can prevent significant losses in case the market moves against your expectations.    

  1. Exit Your Position When Situations are Unfavourable

When trading intraday, you may notice some stocks exhibit price-give reversal. It is a situation in which an asset’s price can reverse after providing profits. Under such circumstances, experts recommend that you immediately exit your position without waiting for the stop-loss to trigger.   

  1. Keep Track of Resistance and Support Levels

As trading starts for the day, the stock prices tend to fluctuate for the first 30 minutes. Traders call this time period the opening range, and the highest and lowest prices recorded during this time period are considered resistance and support levels. 

To become a successful intraday trader, you can monitor these resistance and support levels. Experts advise to purchase stocks if they exceed the opening high range and sell in case they depreciate below the opening low range.   

  1. Go With the Market Trends

Experts also suggest that you always go with the market trends. It may happen that the market is moving against your predictions, and under such circumstances, it is suggested that you simply go with the flow. 

For instance, if the market is showing bullish trends, you can buy stocks, and in case it is bearish, you can sell your holdings short to book profits. 

  1. Trade with an Amount that Won’t Strain Your Finances

If you are new to intraday trading, you can consider trading an amount that you can afford to lose. This is because the stock market is susceptible to fluctuations, and it can be hectic to predict the trends accurately.      

  1. Actively Monitor the Market Trends

For intraday trading, it is a must to monitor market movements throughout the trading session actively. Doing so, you can gain a clear understanding of the current market trends, and it will help you make better investment choices.  

Final Word

These are some of the tips and tricks that you can keep in mind when you plan to indulge in intraday trading. However, this form of trading can be risky due to the high inherent volatility. Thus, you should always assess your risk appetite before starting.  

Frequently Asked Questions

What is the best time for intraday trading?

As per stock market experts, the best time to perform intraday trading is from 10:15 AM to 2:30 PM. This is because the morning volatility subsides by this time, making it possible to conduct profitable trades.

Can I place intraday orders after market hours?

No, you cannot place intraday orders after the market closes. You must square off your positions before each trading session ends for intraday trading.

How many times can I buy and sell stocks in intraday trading?

You can buy and sell stocks as many times as you want in intraday trading. However, it is recommended to trade using one or two stocks at most to track price movements efficiently. 

How can I reduce losses in intraday trading?

You can reduce losses in intraday trading by selling your holdings early when they reach your target price. Moreover, you can also use a stop-loss order to close off your position in case the price starts falling.  

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