In India, investors and traders alike consider intraday trading to be nothing short of a risk. The allure of intraday trading is a strong draw for most of us. Trading day-to-day means taking a position in the morning and cashing out the proceeds by the evening. You may take positions that are a multiple of the money at your disposal without having to deal with demat or delivery. The reality of intraday trading, however, is much more complex. Before engaging in intraday trading, you should familiarize yourself with the ins and outs of the practice. It’s a common misconception that only the lucky can make money in the stock market, especially when it comes to intraday trading or trading in general. But that is not the case.
When it comes to intraday trading, there are a number of little-known tricks that may boost your chances of success. Learning these industry secrets allows them to analyze the markets better and make profitable trading decisions. It is possible to learn the tricks of the trade for intraday trading from others who have been doing it longer and are more successful.
If you are a beginner, then it is highly advised that you should first join a good stock market course and learn trading. The stock market is highly volatile; if you put your hard-earned money without any knowledge, then you might lose your money. The Thought Tree is one such stock market institute. Now, let’s see some of the secrets you must know about Intraday Trading.
Secrets of Intraday Trading
1. Key players dominate their respective markets
It is true that large players with large investments may manipulate the markets, even though it is against the law for anybody to affect markets or produce volatility in the stock markets intentionally. Operators are responsible for this. Large participants, such as large brokerage houses or parties with a large amount of money invested in the markets, sometimes use the services of several smaller brokers or traders to effect market manipulation.
2. Influenced by Emotion
Intraday trading is distinct from other types of trading because of the strong emotions at play in these markets. A market drop is likely if investors worry about the state of the economy. It has been shown that stock prices go up when people feel optimistic about the future. This has the most significant impact on the markets on days when a big event is anticipated. For instance: The outcome of an election. To capitalize on the unexpected volatility, intraday traders always put their bets on the markets before the event takes place. Taking a stance like this might significantly impact the markets and the economy.
3. The search for “logic” may not always be successful
Because of the emotional nature of intraday trading, rationality in the stock market is not always to be found. The market often seems to defy reason because investors can’t decide whether to purchase or sell. When this occurs, predicting the future course of the market is impossible. Even intraday traders who rely on technical analysis need at least three indications before deciding to purchase or sell a stock. Accordingly, a professional intraday trader has to be ready to handle such irrational market behaviour.
4. Failure may be avoided with the help of Stop Loss
If the price of security you bought starts moving in the wrong direction, you may protect yourself from making a huge loss by setting a stop loss. The value of a stop loss is often undervalued. When trading on margin, as is done in intraday trading, failure is more likely if a stop loss is not in place. In trading, a stop loss order is a safety measure that should never be overlooked.
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5. Investors should pay attention to all Stocks
You should think twice before investing in a lesser-known firm with solid development prospects. The key to profitable intraday trading is selecting equities with sufficient liquidity and volatility for both buying and selling. When selling, there must be buyers, and when buying, there must be sellers. It’s not a good idea to engage in intraday trading with stocks that don’t have a healthy balance of buyers and sellers.
You may learn to trade like a pro and make serious money in intraday markets if you take the time to familiarize yourself with all the finer points of intraday trading. Certified investment advisors who base their advice on research help their clients learn the finer points of the trade so they may succeed.
The only way to become a successful intraday trader is through experience since there is no magic formula. When it comes to intraday trading, the most important rule to remember is that there will be no golden rule. It’s a skill that may be honed with practice since it requires self-control and careful attention to potential dangers. ‘There is no royal way to Geometry,’ Euclid famously said. Indeed, the same holds true for trading on the same day.