Intraday trading allows you to enter and exit the position within the same trading session, but here the question is how to make money from intraday trading.
To all those, who are thinking of beginning their journey, it is important to see the reality, that it is not easy. One has to plan and trade strategically to earn profit in day trading.
Although it is difficult but not impossible. So, let’s learn how you plan you trading and reap maximum benefit out of it.
How to Earn Profit in Intraday Trading?
If you want to be a full-time trader then intraday trading is an option for you, but before you start have you checked, “Is intraday trading profitable.” For this, there are a few things that you must consider and ask yourself first, like whether you want to do intraday in stocks or in options.
The reason is that both have their own pros and cons. On one hand, where trading in stocks is less risky one cannot expect huge profit in intraday. On the other hand, options can give you decent money in hand daily but at the same time are highly risky.
However, the concepts and analysis for both markets are almost the same hence this decision purely depends upon understanding of how intraday trading works.
Intraday trading is one of the short-term trading styles. There is no range of capital to start, you can either invest 1000 rupees or 100,000. It is a very active approach of investment in which you have to quickly analyze stocks, trends, or news for investing and getting profits within the same trading day.
Intraday Trading Tips for Beginners
Irrespective of which segment you choose, there are a few tips and intraday trading rules that you must follow to earn money from intraday trading. Here is the list:
1. Start Small
No doubt, every beginner wants to earn maximum profit from the market, but as a beginner trader you must focus more on learning and understanding the market rather than investing your capital.
There are ways where you can start trading without money you can do paper trading using online platforms. However, to build your psychology, it is important to use real money in the market.
Even in that case, you can start intraday trading with 1000 rupees. The profits would not be huge, but it will prepare you to earn good money later in intraday trading.
2. Choose Liquid Stocks
Do you know the first rule of intraday trading?
If you want to make a maximum profit or at least earn 1000 rs per day in share market then “Always” look for liquid shares or shares with high volume. Number of shares that pass from one hand to another during a day is referred to as volume. The possibility of profit depends upon the liquidity of stock since the position has to be closed before the trading hour ends. Analysis and viewpoint of others should also be evaluated, following your conclusion.
3. Add Stop Loss
As a trader, you often look for how much profit is good for intraday trading but have never thought of defining a loss.
Stop-Loss is one of the important aspects of Intraday trading. You should make use of this strategy frequently to cut down your losses by making use of stop-loss.
You should set the stop-loss at 1% as a beginner. Don’t know what it means? Let us explain!
Let’s consider that you have bought shares of a company at 1600 rupees, you need to keep the stop loss at 1%., which is 16 rupees. You need to close the position as soon as the price drops to 1584 rupees to prevent further loss.
Simple! Wasn’t it?
If you keep your loss in check, it will be easier for you to attain your financial goals and make money in intraday trading.
4. Trade With Market
Whether it the physical world or trading online in the market, it is important to respect the place. If you follow the right path, you will end up making a profit.
In simple terms, follow the market trend and build your strategy accordingly.
For example, if the market is near its resistance, then instead of taking an immediate selling decision, one must wait to check the next move. Only if the market reverses or gives a signal of reversal must one consider going short in intraday or buying put options in derivatives.
However, the breakout of resistance brings an opportunity to make money by going long. Going against the market or making quick decisions can actually lead to losses instead of profit.
5. Do Proper Research
Research is the key to trading and especially when you are doing intraday, it is important to do proper research in terms of picking a stock and in defining proper entry and exit.
For this, there are different ways, some traders wait for a breakout in the daily chart while some rely on the reversal in the market. Whatever, the trading method you use, it is important to check the movement of the stock by doing a proper technical analysis.
Further, it is important to be aware of the market news to stay away from highly volatile stocks, that can lead to losses.
6. Choose the Right Time Frame
The major challenge that comes in front of intraday traders is to choose the right intraday trading time frame for analysis. Considering intraday trading in equity, one must consider the daily time frame for trend determination and to find breakouts and reversals.
However, to take a trade position in the market, one must use 15 15-minute time frame. However, you can reduce this time frame further to 3 min depending on your expertise and experience in the market.
For options trading, after analyzing trends on daily charts you can make an entry or exit using 5 min time frame.
7. Maintain Trading Journal
Last but not the least is the use of trading journals. You might have heard, that people maintain a dairy of your life where they capture the important moments of their life.
A trading journal is similar to that where you record your trades. This helps you examine your failures and the strategies that help you make money in intraday trading.
An ideal trading journal must include, the date of trade, quantity, entry price, exit price, average profit or loss, and strategy that you use to take that trade position. This also helps you build your trade psychology in the market and maximize your profit.
Conclusion
You can earn daily in the share market if you know how to make money from intraday trading. It is not that simple, to execute any of the strategies like scalping, momentum trading, or range trading, you must be capable of technically analyzing the stocks. There are many Books for Technical Analysis you can read to have a deeper understanding.
No doubt learning and understanding the concept of intraday helps you in earning profit and building a full time career. However, apart from knowledge there is another eligibility criteria for the same and that is your employment.
That does not mean that you need have a job to do trading, infact if you are a government employee you need to consider can government employees do trading in the share market?
There are a few rules and regulations which implies that a government employed person can invest in mutual fund and hold shares for long term but cannot trade intraday and in options market.
After checking your eligibility and on the basis of your interest there are many ways to learn how to earn money from intraday trading but one of the most effective ways is to enroll in our intraday trading classes now to have massive returns in the future.
Before investing capital, invest your time in learning Stock Market.
Fill in the basic details below and a callback will be arranged for more information:
