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What are the common Steps to Build the Best Intraday Trading Strategies

What are the common Steps to Build the Best Intraday Trading Strategies

Not everyone is aware of term intraday trading! It is all about accurate timing and understanding of the market. The best intraday strategy works only after the technical analysis gets done along with the practical implementation, using the indicators and perfect risk management. Here you will find the list of some great intraday trading strategies.

How it can help beginners is to start trading. With some regular practice, any person can gain expertise in this. When you are doing intraday trading, you should do the backup of risk with stop-loss limits to prevent the loss. It is you who has to find the trading style that meets your requirement as well as disposition. 

  • Momentum Strategy 

As per the name, the basis of this strategy is to make the most of the acceleration in the market. This includes tracking of right stocks before doing a considerable change occurring in the market trends. Based on this change, the traders can either buy or sell the securities. The stock choice depends on the latest Real-Time News Updates, announcements of takeovers, quarterly earnings, and other things.

 It is important for intraday traders to learn such news related to the stocks that are on their watch list and place to buy or sell the orders consequently. As the share prices fluctuate due to different external factors, the intraday traders must make instant decisions to earn the returns. The momentum describes the period for which the individuals hold the shares. 

  • Breakout Strategy 

When it is related to buying and selling securities on the same day, the most important factor is the timing. This intraday trading strategy consists of finding stocks that have broken out of the territory in which the trading is generally done. As an alternative, a trader can search for the stocks that are about to trade in the new cost range. In simple words, a trader has to spot the hall points at which the share price sees the fluctuation of rising or falling.

 In case the stock price upgrades above the threshold point, the intraday traders prefer to enter the long positions and purchase shares. The stock prices may fall below the threshold point, and it is a clear sign for people to go for short positions or selling of shares. The basic idea behind this strategy is that when the share price crosses a threshold point, this trend will keep on continuing and there will be an increase in the volatility. 

  • Reversal Strategy 

This kind of trading strategy is linked with higher risk. It generally involves making investment decisions against the trend of the market, based on the calculations and analysis. When compared to other methods, this kind of intraday trading strategy is a bit tough. The reason behind this is that the traders should have comprehensive knowledge related to the stock market news today. Moreover, specifying the pullbacks and strengths precisely can also be a challenging task. 

  • Scalping Strategy 

This strategy involves making financial profits from just a small price change. This is commonly used by intraday traders when purchasing or selling items takes place. Also, the individuals who get confronted in high-frequency trade make use of this technique.

A person needs to keep in mind that the fundamental or whole technical setup does not have much bearing in this case. In fact, there is a great significance of price action in this strategy. When choosing the stocks, the individuals need to opt for this intraday trading strategy and also need to make sure that they pick the shares that are both liquid and volatile. 

  • Gap & Go Strategy 

This strategy consists of finding stocks that don’t have any pre-market volume. The opening cost of these stocks denotes a gap with respect to the closing price of yesterday. When the stock price opens at a higher rate as compared to the closing price of the previous day, this is referred to as a gap up. In the case of the opposite situation, it is referred to as a gap down.  The traders who opt for this strategy will recognize such stocks and purchase them accepting that the gap will get closed before the closing bell. 

Rules for Intraday Trading

The basic rules of intraday trading include planning your trading strategy and sticking to it, identifying stocks that are best for intraday trading. Also, trading with funds that are in your budget without impacting financial status, thorough Reuters news today research and picking stocks having high liquidity.

Next is keeping track of financial gains & losses, closure of all open positions. In the case of intraday trading, there are different methods that one can opt for to get the returns. Before implementing it to make the financial gains, make sure you understand the intraday strategy completely.

 

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