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Learn how to make money in intraday trading and how to select the right stocks using these intraday trading strategies within the best timeframe.
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Introduction Trading in the stock market always comes with risk and if not done with adequate research and precaution can lead to huge losses, With the right strategies and proper analysis you can also make money in intraday trading on a daily basis But the question here lies: Is Intraday profitable than Investing? Investing in the stock market is like an ongoing and uphill journey where you have to be patient and strategic in your approach. At the same time, trading is a downhill walk that can give you benefits in the short term if you apply the right strategies and stay disciplined in the stock market.
What is Intraday trading? Contrary to investing, Intraday trading is the strategy of buying and selling shares on the same day of the stock market. It is also called day trading and its primary purpose is to earn profits through market indices. Intraday trading is not done for investing but with the purpose of earning quick profits by predicting market movements. This kind of trading can be done in almost all types of stocks.
Let’s understand what is Intraday trading with the help of an example: The price of a stock is 500 in the morning and by evening (3:15-3:30 PM) it rises up to 550. You have already purchased 1000 shares of that stock in the morning and if by evening (3:15-3:30 PM) you sell all these stocks, then in a few hours only you will earn a profit of 50,000. This is how Intraday trading works.
Intraday Trading Indicators here are some of the best indicators for Intraday trading that help a trader to make money in Intraday trading. Moving Averages Bollinger Bands Momentum Oscillators Relative Strength Index
1). Moving Averages The majority of stock traders are dependent on the daily moving average (DMA) of the stock. This moving average which is one of the best indicators for Intraday trading is a line on the charts that depict a stock’s behavior for a particular period of time and these charts show the opening and closing rates of a stock. So, with the help of this minimum average line, Intraday traders get an idea of the average closing rate and fluctuations in the price of a particular stock which assists them in making the right calls regarding their stocks.
2). Bollinger Bands These bands consist of three lines which are upper limits, lower limits, and moving averages. Whenever a particular stock's trading range is analyzed, it becomes easier to locate the price variation and action can be taken accordingly. 3). Momentum Oscillators Momentum oscillators measure how much a stock price has changed over a certain period of time and help intraday traders in predicting the prices of stocks to go up or down. It ranges between 1-100 and assists traders in making a decision on whether to buy a stock based on the price movements of stocks between 1-100.
4). Relative Strength Index Also known as RSI, is between the range of 1-100 and shows graphically at what price point shares should be bought or sold. It is a line graph that indicates the movement in recent stock prices and helps traders assess whether the stock is in an overbought zone or underbought zone. If the stock price is above 70 it is considered to be in the overbought zone whereas if its price is below 30 then it indicates an oversold zone.
Intraday Trading Strategies It is one of the important Intraday trading strategies with the help of which an Intraday trader is able to multiply small profits in a single day because of small changes in stock prices. With the help of scalping, a trader can multiply his profits given that he executes the exit strategy well. For executing a scalping strategy, a trader very much relies on technical indicators such as candlestick patterns and MACD, Supertrend, and RSI indicators. Get to know in detail what is scalping and how it works in the trading world.
2). Range Trading With the help of range trading, day traders identify the range of buying and selling stocks in a short period of time. It is a popular trading that helps traders in identifying oversold and overbought zones of assets (also known as resistance and support zones). Intraday traders identify these zones by analyzing indicators and buying assets during oversold or resistance periods and selling them during overbought or resistance periods.
3). High-Frequency Trading This complex algorithm is a type of financial trading that is used to transact multiple orders in a fraction of a second. This trading strategy uses complex algorithms to analyze multiple market conditions and place orders based on them. With the help of this strategy, companies place multiple orders in seconds which creates liquidity in the market and allows them.
4). News-Based trading In this trading strategy, with the help of multiple news sources, traders try to identify such events that could affect stock prices and earn profits from them. For example, if traders find out from a news source that Company A plans to acquire Company B, such news could create volatility in that particular stock and traders could make a profit from the news by using it in their favor. Know How to select Intraday Trading stocks?
FAQ Ques1. Is Intraday Trading Profitable? Ans- Trading can be profitable, but the key to success is knowledge and an understanding of the market, price movements, and the sector in which trading takes place. A trader who studies markets can make good profits in intraday trading. Que 3.How are the profits from Intraday trading taxed? Ans. The profit which you earn from Intraday trading is termed speculative income. It appears under the heading “Income from business or profession.” When you make a profit in Intraday trading, it’s added to your total income, and you are taxed depending upon which tax slab you fall under.
Ques 7. Highest Intraday Profit in India? Ans. Ghanshyam Yadav recorded the highest intraday profit in India by earning 2.65 crores in a day. His accomplishment was showcased on videos by Satish K, highlighting exceptional trading skills and strategic decision-making. Ques 2. How Much can You Earn from Intraday Trading? Ans. The amounts of money you can make through trading can reach thousands, lakhs, or even more. Intraday profits are dependent on a few key factors: What is the amount of capital you invest every day in the markets? What is the maximum risk you are willing to take on your bets Expertise in trading and technical indicators. Patience.
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