In intraday trading, also known as day trading, stocks are bought and sold on the same day. The intraday trading is much riskier than delivery trading for investors. To avoid any kind of loss and gain many profits in a short period, a beginner in intraday trading must know the basic and best strategies inside out. For beginners in intraday trading, a quick tip is to invest only as much as one can afford without disrupting the financial situation. 

Intraday trading can result in profits or losses, depending on how well the investor uses the stock market’s strategies. Also, intraday trading has the advantage of allowing investors to leverage price fluctuations. However, when an intraday trading strategy isn’t used properly and in the right way, it can result in losses. Therefore, this article presents the best intraday trading strategies that you can consider.

Intraday Trading Strategies

To trade intraday successfully, you may consider the following intraday trading strategies.

Momentum Trading Strategy

Momentum’s trading strategy is all about investing in the right direction and at the right momentum. Before investing in a stock, investors pick the right stock to take advantage of a significant change in market trends. The choice of stocks is facilitated by news reports related to the stocks which can either make the graph rise or fall. Here, an intraday trader’s role is to study such news before the market opens for investments, and then to trade accordingly. 

As an intraday trader, you need to keep in mind your data will go up or down based on external factors, and you need to make a quick investment decision. Investors can hold the security for minutes, hours, or even the entire day, depending on the speed of market movement. The momentum trading strategy is useful, but it requires you to make settlements quickly as soon as the news breaks.

Reversal Trading Strategy

It is not recommended for beginners to engage in reversal intraday trading strategy, which is one of the most risky and high-risk trading strategies. This strategy involves investing against trends. The trading will snap back and profit from the calculations and analysis. However, beginners should not use this strategy as it requires much market knowledge and experience. In addition, it is a difficult strategy because investors need to correctly identify the pullbacks and their strengths. Daily pivots are one of the supporting techniques in reversal trading strategies intraday traders use to trade daily lows and highs.

Breakout Trading Strategy

For intraday traders, timing is essential. Making a trade decision with a breakout strategy requires an understanding of timing. The method involves finding the threshold points at which the stock price rises or falls. When the price continues to rise above the threshold point, investors consider taking long positions and buying the stock. Alternatively, the investor may consider short positions or sell the stock if the price falls below the threshold. 

Gap and Go Trading Strategy

Sometimes, stocks open at a gap from the previous day when they do not have pre-market volume. It is called a gap up if the gap opens higher than the previous day, and a gap down if it opens lower. These situations occur when news acts as a catalyst. The intraday traders bet on such stocks, believing the gaps will close by the end of the day. For those who want to make quick and easy profits without a lot of risk, this strategy is ideal.

Moving Average Crossover Strategy

The moving average is one of the most important indicators of stock market trends. Whenever the values rise above the moving average, it is called an uptrend, and when they fall below, it is called a downtrend. The key to a moving average crossover strategy is picking the right stocks at the right time. These can be worked on with the help of catalysts, like news about the stocks.

Conclusion

These are some of the best and most popular intraday trading strategies. However, the reversal trading strategy is one of the most challenging to execute as the trader goes against the trend, whereas in other strategies, the trader follows the trend. The key to successful intraday trading is to watch the market trend and decide when the time is right. For this, the best mobile trading app like Kotak Securities is essential for real-time monitoring and quick decision-making. To succeed at intraday trading, one must be able to make swift investment decisions while closely monitoring market trends. At the end of the day, timing is important, and a decision must be made at just the right time. Overall, these strategies require a keen understanding of market dynamics and adaptability to changing conditions.