7 Tips To Know For Intraday Trading

Indian Stock Exchanges are powerful indicators of how the Indian economy is growing in leaps and bounds. In recent years, intraday trading has gained a lot of attention as Exchange Trade Funds (ETFs) and stocks have grown in popularity among people and small investors as an investment option. Intraday trading, as its name signifies, is the trading of securities within a trading day in the market. Intraday trading is what affects the prices of securities during the market day and thus is directly responsible for the market highs and lows both for individual security as well as the whole market.

Intraday trading involves continuously monitoring the prices of securities throughout the day to take advantage of spikes in their price or avoid any potential falls. It is not easy for new traders, in particular, to avoid making certain mistakes when they are exposed to this volatile environment. That is where the following seven tips can help them:

⦁ Rumors are dangerous
The first and one of the most important tips for intraday trading is not to believe in the rumors that go around the stock market. It must be understood that in today’s digital environment, rumors go around much faster than facts. These rumors cause a temporary fall in prices, and many investors may be tempted to cut back their losses by selling their securities. One should make a point of checking the credibility of every news one hears to avoid it.

⦁ Don’t be impulsive.
The biggest danger of intraday trading is impulsive trading. Such impulses are rarely profitable – one should instead make a point of only making informed decisions.

⦁ Always be eager to learn.
Another excellent tip for investing in intraday trading is to always be eager to learn. One must make a point of observing and listening to other investors and learn any useful tips they may have to teach.

⦁ Information is the king.
One should also make a point of gathering information on the companies one is interested in so that one can always make an informed decision. Researching some industries and investing is one of the most important tips for intraday trading.

⦁ Consider the PE ratio before investing.
Another important tip for intraday trading is to know what is pe ratio of a company before investing in it. The PE ratio, also known as the price-earnings ratio, is the ratio of a share price of a company to its earnings per share.

⦁ The first hour of the market day is the most volatile.
During the first hour of the market day, most investors are just reacting to the price movements of the previous day. Thus, there is excessive volatility before the market settles down. One should be careful of this phenomenon during intraday trading.

⦁ Keep monitoring the prices.
The last but not the least important tip for intraday trading is to always keep an eye on price movements as one can only gain from this kind of trading if one is quick to gain from the short-lived trends.

The Bottom Line

One can easily wrap the above discussion by concluding that intraday trading is an art that involves a clear understanding of the market and with hopes that the above tips will help new intraday traders to make a good start in the market.