WHAT IS INTRA-DAY TRADING?

Intraday Trading

Intraday Trading, also known as Day Trading, is the system where you take a position on a stock and release that position before the end of that day's trading session. Thereby making a profit for yourself in that buy-sell or sell-buy exercise. All in one day.

You are not concerned about whether the market is going down or up. You are not concerned with market sentiments. You are not concerned with the fundamental strengths (or the lack of it) of any company. All you need to predict is that the stock price will either rise or fall very sharply in the course of the day.

When you take up day trading, the rules that may have helped you pick good stocks or find great money makers over the years, trading 'normally', will no longer apply. This is a different game with different rules.

All of the methods that are used to identify stocks that are appropriate for normal delivery-based trading are dependent on either technical analysis, fundamentals or insider information. Technical analysis with charts is a way of using historical price/volume patterns to predict future behavior. Fundamentals deal with the market strength of a company, involving detailed study of balance sheets, branding, positioning, etc.

None of these, on its own, hold good for day trading. The day trader's choice of scrips and positions has to work out in a day. There's no waiting until tomorrow to see how the charts play out before committing capital. If the day trader sees an opportunity, he has to go for it. NOW. Or it's gone. Things can change drastically in minutes. When it's time to buy or sell, it's time to buy or sell, and that's all there is to it.

Day trading can be a great way to make money all on your own. It's also a great way to lose a ton of money, all on your own.

Not everyone can be a day trader, nor should everyone try it. If the idea of being in charge of your own business and your own trading account is exciting, then day trading might be a good career option for you.

Fundamentals

What are the objectives of the intraday trader? One point objective: to make profits. As much as possible. Simple. Whether the market is going up or down, we are not concerned. Whether there is a recession or not, we don't care. We want our daily profits. Simple. But to realise this 'simple' objective we have to undertake one very difficult step. That is:

Pick out a few stocks that can possibly give good profits through Intraday Trading. It is not physically possible to track in real-time all of the 1000+ scrips listed at NSE every day to see which is going up or down sharply. So we need to make a few educated guesses and narrow down our watch-list to 5-to-7 stocks that show promise for the day.

The process of finding these stocks is not easy. Because none of the normal methods used in locating stocks for investment work here.
Statements like "ABC has gained by 25 points today" is good news to many players in the stock market. But it has no meaning in intraday trading if ABC has opened 24 points higher than yesterday's close and has then risen by only 1 point throughout the day.
On the other hand, if ABC has opened at +1, gone down to -5 and then rallied to close at +25, it will be the toast of intraday traders for that day.
You can make your profits only if ABC was spotted in advance and entry/exit points were proper. It is here that IntradayTrade dot Net can help, by identifying potential winners in advance.
In another scenario, company GHF is in the red as it has lost 50 points. People who have bought shares of GHF have lost out. However, if in this journey of -50, it has gone down to -80 then recovered to +5, finally ending at -50, intraday traders have had a field day.
In all the daily reports and comments given by 'experts' GHF will be shunned as a loser and the public will be strongly advised to stay away from GHF. But to intraday traders, its a winner.
How do you lay your hands on the likes of ABC and GHF before all this happens? We at IntradayTrade dot Net specialise in giving you the names of such stocks in our daily 'Suggests'. Check our past performance.
Same happens when the NIFTY falls. If the NIFTY is rallying strong and moving up fast, all major stocks are also rising. Finding stocks in this situation for intraday trading in LONG is not difficult, as everything is rising. But when the NIFTY is going down, all are going down with it. Finding that exception which has gone up even on those days, or has shown enough up-down range to give intraday profits in LONG, is the real challenge.
IntradayTrade dot Net has won these challenges many times and have 'Suggested' stocks that have given profits of at least 1-to-2% even on such 'bad' days in LONG.

You can trust IntradayTrade dot Net to overcome this one fundamental task of finding which stocks to track to realise maximum profits through intraday trading. Irrespective of market conditions.

How to go about it?

Like any stock trader, to make money through intraday trading at the stock market you must have a trading plan, set limits and stick to them. You must trade based on the data on the screen — not based on emotions like hope, fear, doubt and greed.

To put that plan in action you need do some preparation and define an objective. That's a basic strategy for any endeavor, whether it's running a marathon, changing your car, or taking up day trading.

Day traders have to move quickly, so they also have to take decisions quickly. You must also have patience. Some days there is nothing good to buy. Other days it seems like every trade can bring you money. But everything just turns around as soon as you really put in some money. Be patient, and take a calculated decision.

What if it's a bad decision? Well, of course some decisions are going to be bad. That's the risk of making any kind of an investment, and without risk, there is no return. Anyone playing around in the markets has to accept that.

Yes, a lot of day traders lose money, and some lose everything that they start out with. Many others don't lose all of their trading capital, but they leave because they just decide that there are better uses of their time and better ways to make money.

Yes, most day traders fail — about 80 percent in the first year. But so do a large percentage of people who start new businesses or enter other occupations.

But two good day trading practices help limit the effects of making a bad decision:

The first is the use of stop and limit orders, which automatically close out losing positions.

The second is closing out all positions at the end of every day, which lets traders start fresh the next day.

Because they close out their positions in the stocks they own at the end of the day, whether winning or losing, some of the risks are limited. There is no hangover. Each day is a new day, and nothing can happen overnight to disturb an existing profit position.

Day Trading as a hobby?

Day Trading as a hobby is a bad idea. Also, trading without a plan and without committing the time and energy to do it right will surely bring losses. Professional traders are betting that there will be plenty of suckers out there, because that creates the losers that allow you to take profits in a zero-sum market.

Day Trading part-time?

Can you make money day trading part-time? Yes, you can, and some people do. To do this, they approach trading as a part-time job, not as a little game to play when they have nothing else to do. A part-time trader may commit to trading three days a week, or to closing out at noon instead of at the close of the market. A successful part-time trader still has a business plan, still sets limits, and still acts like any professional trader would, just for a smaller part of the day or week.