This Blog is Educational Purpose.
Posted by Experts
Intraday trading is one of the most followed trading practices to ensure an alternate source of income for beginners these days. But as I said many times, it’s not always profitable because it involves the higher risk factor than the other trading patterns.
It could give you sometime profit and some time loss as well. So as per my point of view, start doing intraday trading only when you have enough technical knowledge and experience but not till then.
Stock selection is the most important part of trading and day trading so choose your stock for day trading wisely. So here I am sharing some tips for stock selection:
- Always choose less volatile stock & liquid stocks for day trading. If you will choose high volatile stocks for intraday trading then it can easily trigger your stop-loss and give you a loss. Some stocks have good volumes & more liquidity and they can give faster profit than other stocks.
- So now in this point, I am going to help you to choose less volatile stocks which have good volumes but they are not highly volatile. In the cement sector, I will choose Ambujacement rather than ultratech or ACC, in the same way, I will choose Apollo tyre rather than Ceat or MRF. From private banks, ICICIBANK and AXISBANK are my favorite scripts for day trading.
- After choosing the stock, the next step is to find out that either that stock is bullish or bearish, and for that, you have to check that stock’s last one week’s movements. If that stock is continuously bullish without consideration of market movement, I will always choose that stock for buying whenever I will find it near day’s low or at lower levels. For example, yesterday and from some days torntpower was not performing with the market so it was the best buying opportunity for yesterday. It was 297–298 yesterday and come up to 304–305, and the lot size of torntpower is 3000 so you can easily make 12k-15k from that.
- In the same way, if the stock is bearish you need to find out sell opportunities from that stock and sell that from day’s high. Yesterday my research analyst and trading advisor “EQWIRES RESEARCH ANALYST” has given me a trade, in which I earned 18000 profit in intraday trading. My relationship manager from eqwires(Rachna) called me and told me to sell Manappuram when the market opened. As I am with them for a long period now and now I have full trust them, I immediately sold Manappuram at a given price by her and as usual, this trade was also a quick intraday trade and in 1st time it gives me 12000 and in the 2nd time, it gives me another 6000.
As you can see in the 1st picture I sold Manappuram at 9.18 and exited at 9.32 with the 12k profit and again I sold and made 6k profit less than 30 minutes.
Now I am going to share some tips related to choosing stocks:
- Never buy falling stocks and especially when the stock has crossed its resistance level because it can trap and give you big losses.
- Buy those stocks which are taking support level and not coming down with the market but rising with the market, so that you will get a good return in that stock in intraday trading.
- Always apply a proper stop-loss in your every trade because in that way you can minimize your loss and maximize your profit, and you can also hold your position by trailing your stop-loss and modify the target so that whenever big movement comes, you can generate a big profit.
- Don’t trade in some stocks which has some recent news or if that stock has quarterly result on the same day because that type of trading is completely gambling. As we all know, these days some sector has negative news like the Banking sector, the auto sector, metal sector, and because of that some stocks are not performing well even after the announcement of 20lac crore package by our honourable Prime minister Mr Narendra Modiji.
I hope i helped you in a proper manner and fulfil your query. If you like my this answer and other answers as well, please keep doing upvotes and share mu answers so maximum people can get help from it and get benefits.
There are thousands of equities to choose from, and day traders can pick virtually any stocks they want. So, the first step for a day trader is to figure out what to trade. Once a trading opportunity has been identified (one stock, multiple stocks, or exchange-traded funds ETFs, etc.), the next step is coming up with some ways to profit from them.
Intraday trading is about buying and selling a security on the same day with an attempt to book profits. It is a kind of a market order where you don’t plan to take delivery or fulfill it. In other words, if you place an intraday order to buy shares, you don’t want to buy them but are hoping for the share price to increase and sell them before the end of the trading day. These orders also allow you to sell shares first even if you don’t own them and buy them during the day to square-off the transaction. In intraday trading, success relies heavily on choosing the right stocks since you only have a few hours before squaring off your position. Hence, picking the right stock is crucial.
- Day traders who execute intraday strategies attempt to profit off of price changes for a given asset using a wide variety of techniques.
- Day traders should select stocks that have ample liquidity, mid to high volatility, and group followers.
- Identifying the right stocks for intraday trading involves isolating the current market trend from any surrounding noise and then capitalizing on that trend.
How to Select Stocks for Intraday Trading
Liquidity
Liquid stocks tend to have high volume numbers. This allows for larger quantities to be purchased and sold without significantly impacting the price. Since intraday trading strategies are dependent on speed and precise timing, a high degree of volume makes getting into and out of trades easier. Depth is also critical because it shows you how much liquidity a stock has at various price levels above–or below–the current market bid and offer.
TRADE WITH THE TREND
While some traders specialize in contrarian plays, most traders prefer and recommend trading in intraday with the trend. Meaning, an intraday trader has to identify the waves of a stock market trend and then try to ride on these waves. This can be possible by conducting intraday trading time analysis.
For example, if you see that the market is rising, you can try to select stocks that offer opportunities to take long (buy) positions. In contrast, in a falling market, traders can try to spot and take short positions where possible. The bottom line is to avoid challenging the market.
STRONG STOCKS VS. WEAK STOCKS,
Once experts identify liquid stocks that move with the trend, they then divide them into relatively strong stocks and weak stocks. Strong stocks are ones that move in the same direction as the market, but more intensely. For example, if the market rises by, say, 1%, then a strong stock tends to rise higher—say 2-3%. Weak stocks, in contrast, tend to rise/fall at a slower pace than the market. Experts usually prefer strong stocks in an uptrend and weak stocks in a downtrend to lower the potential for loss. But remember, it’s better to avoid trading when there’s a weak or no trend in the market. After all, stock markets are not always trending. Sometimes they stall as well. When that happens, consider being patient and waiting for markets to trend again.
Invest in correlated stocks
There are many intraday stock selection strategies, but some are only suitable for professionals. One should always start with simple trading strategies. One of the simplest intraday trading strategies is to invest in stocks that are highly correlated to a sector or an index. The performance of the broad sector or the index gives a clear idea of the trend and profiteering from the investment becomes relatively easy. One can check the performance of a specific sector from the website of NSE and select a stock which shows a clear upward or downward trend. Since the stock price movement is co-related to the sector, it is easy to trade with the trend of the market.
Entry and Exit Strategies
You may have picked the sweetest stock in the world, but profiting from it will rely on following specific strategies. While there are numerous intraday strategies, the important thing is to stick to certain established guidelines. By looking for certain intraday trading signals, you are more likely to succeed.
Every Strategy has a specific/particular way to pick stocks for the next day.
I would like to share the way I pick the stocks for my price action strategy.
Price action strategy is all about Support/Resistance, Trendlines, chart patterns, and breakout.
so, what are chart patterns? ( take a look below)
So, when does a breakout happen?
Eg:
What happens to a pressure being applied on an inflated balloon?
It's obvious that it will burst. Isn't it?
The same goes for the stocks too, The more consolidation the best the breakouts are.
So, you will have to find the stocks which make no movement or nearly zero percent chance. (A stock making 1% -2% moves is still a vague movement according to me and you can have some patterns being formed in those)
1)Firstly sort the stocks, by just clicking the percentage change option in trading view(which you can find in the upper right corner of your watchlist- I have attached the screenshot below, have a look).
2)Now, you have to go through all the stocks one by one on both side of zero percent change ( in the above screenshot –CCCL, DISHTV scrip is zero percent change)
Trust me no Screener is gonna help you find those patterns
3) Just take a look on every chart for a minute, whether you see any of the above chart patterns and redlist those stocks if you find any (it comes with experience - I use only triangle and channel patterns personally as I feel they fetch me good money)
Watchlist for Tomorrow (24.11.2020)
- Ambuja cement - Symmetrical triangle
2. Appolohosp - Ascending triangle
3. Bandhan bank- Symmetrical triangle
M_M - Flag Pattern
5. PFC - Symmetrical triangle
6. TVSMOTOR- kind of symmetrical triangle
Watchlist we traded today (23.11.2020)
Before we talk about how to pick a stock, it is important to note that as a day trader, since you don’t have the luxury of taking delivery and holding on to the stock, one wrong decision can lead to heavy losses. Typically, if you want to buy and sell any commodity within one day, it should have certain features like:
High demand (liquidity)
Price fluctuations so that you can buy low and sell high (volatility)
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