The Indian stock market delivers innumerable trading methods and offerings that will suit the risk-craving and financial goals of most individuals. Anyone can pick from short term and long term investment schemes, swing trading, maturity based investments and intraday trading to raise their early investment by manifold. It is analyzed that of all the trading types, intraday trading is said to be the well-profitable and also challenging at the same time. In intraday trading, the securities are bought or sold in the same day. The shaping off securities should be managed before the closing of the market for the corresponding day and cannot be carried forward to the next trading day. As a result, an investor needs intraday tips for the maximum returns as well as to face the risk involved that is far higher than other forms of trading.
Risks incurred in intraday trading:
- Capital loss – even if the trade is profitable for the trader, there are extensive direct costs incurred with the capital loss such as software, hardware, and initial news services needs to be paid before one can begin trading.
- Market movement – there are so many traders those are chasing too few opportunities, which means that only those traders who quickly recognizes an opportunity and took action for to meet them are likely to make money. Being late taking an action to a trade can turn a potential profit into a loss.
- Psychological addiction – counselors states that the intraday trading is like a drug which is much more addicting than any other kind of gambling.
Intraday tips for common strategies to overcome the risk factors:
Daily Pivots – Expecting that day traders may buy at the low price and sell at the high price or, on the contrary, short sell the stock at resistance and buy back the stock to support the position.
Momentum – Traders buy a stock when it is moving upward with growing volume. And they sell when the price is getting downward with volume, supposing that the price track continues after they take a long or short position, so they close the transaction with making a profit.