The buying or selling of stocks on the same day is an intraday trading or day trading. Day traders will be able to buy first, sell later or purchase at a later date. They buy when the markets are positive and sell when they're negative. Day trading in stocks, foreign exchange futures, and options is usually very active. Day traders find stocks of liquid, highly volatile momentum in the stock market and enter or exit at opportune times.
Day traders generally use a high degree of leverage. While leverage can significantly increase their profit margins, it can also be a significant financial burden if the trade goes against their expectations. Day traders must watch out since they must analyse news on the move and charts as professionals.
Beginners and experienced traders use several-day trading strategies to make a profit. Day traders prefer trading in the stock market efficiently. Here are their top strategies:
Momentum trading is the identification of the market trend and the riding of the wave. A market trend may be bullish, neutral, or incoherent.
Scalping means making several extreme short-term trades and taking profits from winning them.
Range trading is to identify levels of support and resistance at the right time for entry and exit. The Fibonacci Retracement Level Indicator is frequently used to establish support and resistance lines.
High-frequency trading, or HFT, tracks price fluctuations and executes trades automatically using an automated computer-based trading system.
To work as a day trader, beginners need a Demat and trading account. Luckily, qualified investors are being provided with Demat and trading accounts by BlinkX. To set up an account and open a trade, you must provide your PAN card, Aadhaar Card or a selfie photo. Besides stock trading, you can also make commodity trades, currencies, futures, and options on the account.
As a day trader, you should be familiar with the trading basics. However, having a balanced view of the market when taking calculated risks is even more critical.
The benefits of day trading are as follows:
Every business decision you make as a day trader is an opportunity for profit. And if all these deals pan out, you can make money much faster than the average investor. In the promotion of day trading, online courses often promote this lucrative advantage.
Compared with the past, modern brokerage platforms make it possible to conduct day trading. Use the home computer and mobile phone to set everything up.
Unlike buying and holding investments, day trading offers a high degree of excitement. Researching a trade, spotting an opportunity, and making a profitable transaction all excite you.
Day traders usually shut down all their investment positions before the market closes daily. This makes them less vulnerable to further losses at night. Regular investors still hold positions and could lose money if something happens overnight when they're not in a position to trade, such as a breaking news report that hurts their portfolio.
Intraday traders decide on a specific landmark where they will conduct their business. You can make intraday profits using "Stop Loss" and "Take a Profit." It minimises the risks associated with it.
Let us assume you bought a share for Rs. 100. You would be okay to earn Rs. 10, but would rather not lose more than Rs. 5. Once your profit target has been achieved, the trade will be closed using a take-profits order. Here, Rs 110 per share will be the take-profit order amount.
Utilising the above example, a stop loss may be established at Rs 95 per share. Your trade closes immediately, and the stocks are sold when the stock drops by Rs 5. A trading safety measure to preserve earnings is the trailing stop loss order. When you use a trailing stop loss, the deal stays open as long as the market moves to your advantage. The trailing stop loss will be triggered when the stock price hits an all-time high and starts sliding, triggering a sale of stocks.
The hallmarks of a successful intraday trade are strong knowledge, thorough research, and rapid decision-making. Risk mitigation strategies must be used carefully when implementing these elements so that you can minimise your losses. If you want to start intraday trading, check out the BlinkX trading app.
Disclaimer: This article is published in association with BlinkX and not created by TNM Editorial.