Intraday trading participants and Strategies

by | Jul 13, 2020 | Basics, Share Market | 2 comments

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Who all Can do Intraday Trading?
In this competitive world and extensively growing technology, If one tells that, it is no longer required for you to worry about and getting yourself a 9 to 5 job or to go for an expensive academic degree, don’t you think you would be interested to go for such a Career option?. The impression of Intraday trading is the same for most of us. Although, the ground reality is altogether different. One need to be upskilled and fully aware of how the market is trending or what are the factors to cause price action in the live market. Basically, when I started with Intraday trading after a better understanding of  Types of Stock Market Trading and What is a Candlestick Chart and How to Read it?  I found it very useful and informative to execute the trade in the live market.

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Market participants 
There are four types of market participant groups –  Consumers, business firms, governments, foreigners. Why we need to know who are the market participants, what is the role of a market participant in Intraday Trading how does it cause fluctuations in price action?

List of Market Participants

  1. Individual Retail Investors
  2. Institutional Investors
  3. Pension Funds
  4. Insurance Companies
  5. Mutual Funds
  6. Index Funds
  7. Exchange-Traded Funds
  8. Hedge Funds
  9. Investor Groups
  10. Banks
  11. Financial Institutions
  12. Publicly Traded Corporations

What causes market movement?

Global Market Crash

COVID-19 pandemic caused a major downfall in the Indian market and we all witnessed a downtrend across the global market similarly, the Indian market NIFTY 50 trended bearish for the past three months.

Market participants

Are one of the reasons to cause market movement in intraday trading – when day trading in the live market you will come across an upward, downward, and sideways trend. Majorly it is due to the increase of volume and amount of buying and short selling going in the background between the market participants.

News effects

on a national level for example – The recent announcement made by the Indian government for relief fund of 20 Lakh crores caused the immense market movement.

Mergers or Investment news in companies

In the recent times of pandemic where other companies stocks were trending bearish reliance industry stock showed the bullish trend due to foreign investment of  $5.7 billion from Facebook, and money from private equity firms Silver Lake, Vista Equity Partners, General Atlantic, and KKR & Co Inc.

The myth of Intraday Trading

There is a lot of myth across the Dalal Street when it comes to intraday trading, amateur individual fall in the trap of investing money without having appropriate knowledge of when to buy long position or Short sell. Most of the cases they end up losing their hard-earned money in the greed of getting rich in a short span of time. But similarly, there are Intraday traders who are successful and are generating there daily living from this format of trading. So, what exactly they do to be successful? Let’s find out some qualities of a Successful Intraday Trader.

Intraday Trading Strategies

The full-time Intraday traders who do the trading for self or work for a Financial institute to earn their daily living from this trading format are highly disciplined and are always up to date with current market events. They use multiple strategies and techniques to invest only in those segments which can deliver them high profit and cost minimum losses. (Check below images for reference)

Discipline trading

Follow a disciplined and Strict strategy and stick to it every day when you do intraday trading. Firstly, avoid averaging – do not average in Intraday trading always set a stop loss. Use Strategy like BO – bracket order or CO – cover order if you are a beginner to avoid major losses. Hold position if the market is in your favor and make maximum profits in long and short selling.

Trading Styles and Strategies

Capital Usage

Use your Capital wisely in Intraday Trading, do not put your entire capital in one go, do multiple trades, and always follow the strategy of using 50% of your capital which you are okay to risk or lose. Trade with certain targets – Do not take Losses more than 2% of your invested capital.

Psychological effect

Keep your emotions in place, go with the market flow, and follow the market directions. Always wait for the Right entry and exit point in day trading, don’t be impatient. Don’t be greedy, while booking profit set a target, follow market direction and Square off accordingly. Accept your losses – don’t hold on to trades which are into loss and lose more money.

Current affairs

Be up to date with the trending activities in the stock market, Financial news, and always review the previous day market action. Always stay updated with the stock market news by using Money controlInvesting.com, The Economic Times and NSE India

Tips for Beginners

Before investing your money into the live market I would recommend you guys to spend more time on paper trading or virtual trading. Wherein you don’t have to invest your real money. Keep track of your daily trades, check what needs to be improved and spend maximum time understanding the candle formation or you can always refer to What is a Candlestick Chart and How to Read it?. Once you are done practicing for a good amount of time and you think you are prepared for live trading, start with minimum capital and try to keep your portfolio in positive, review on weekly basis and increase your capital for bigger profits. Do you think this strategy really works?

My Portfolio

Yes, the above tips and strategies do work only if you do intraday trading in a disciplined manner. I am sharing my own bit of experience when I started newly as Intraday trader, you will find in below images that I have focused on bigger profits and controlled losses. I have also avoided trading when the market is highly volatile or going sideways. (Check below images for reference) 

High Profit

Minimum Losses

To Summarise
Intraday trading is a Risky format of trading one should only trade with money which he/she is okay to lose. If you check the above images you will find out that I have made profits as well as losses at the same time. You will definitely face losses in the stock market, but if you are disciplined with your trades and trading strategy you will be able to control your losses and capitalize on bigger profit. Stay updated on day to day life with news, online videos, and blogs related to the stock market.

So do you think you can do Intraday Trading?
If yes, then do follow the tips and strategies mentioned in this blog and click here Intraday Trading with Kite Zerodha to see step by step explained method to trade online with Zerodha. Also, share how was your experience of Intraday trading under the comment section below. Feel free to ask if you have any queries related to Stock Market or stock trading. Subscribe to our blog for Trading related information and if you want me to write on any specific topic, share your suggestion in the comment section.

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2 Comments

  1. Jerry Williamson

    Great! Thanks for this guide. It would be helpful for those who are looking for the same.

    Reply
    • Nilesh Langhi

      Thank you for visiting our site … do let us know if you want any specific topic to be covered. Also, check our Travel and technology section.

      Reply

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