How to Select Stocks for Intraday Trading in India

While the market has infinite complexities, put in the simplest terms, the goal of investors is to buy low, sell high, and make a profit through the difference between the two. One could argue however, that a majority of the tasks of being a trader or investor, is done outside of buying and selling stocks; more specifically, in research. From technical charts to online trading strategies, investors and traders spend a good amount of time researching a stock, before they begin buying and selling. In this article, we will break down 5 stock trading secrets to apply to your online trading strategies.

They sift through stocks to park their expectations with stocks that reflect volatility with volume. This process is called screening stocks, which involves the following. When employing the breakout trading strategy, you must also check the breakout indicators and ensure you are on the right track. If you notice that your strategy is not working as per the expected momentum, approach your investment advisor and see if it can be rectified.

Enjoy a great reading experience when you borrow the Kindle edition of this book with your Kindle Unlimited membership. Each Great on Kindle book offers a great reading experience, at a better value than print to keep your wallet happy. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month. A common guideline is not to trade stocks with a liquidity ratio of less than 10%. You can buy and sell large volumes without impacting the trend you want to benefit from.

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As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Past performance of securities/instruments is not indicative of their future performance. 4) No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account. To predict price changes objectively, a person should be familiar with the fundamentals of both technical analysis and fundamental analysis before engaging in intraday trading.

Before you rush into a trade, ensure you do your bit of thorough research first. Under this technique, the trader looks for support and resistance levels, which are price levels below or above which the stock’s price does not often rise. They then wait for the price to break out of these levels before entering the trade with the expectation that it will continue to move in the same direction. A breakthrough occurs when the stock price moves beyond these levels. Traders use trendlines and horizontal lines to determine and trade based on these levels. The Rs. 20 price level is more likely to be a support or resistance level than Rs.

week high refers to the highest market price of a given stock over a one year period.

Beginners frequently experience difficulty selecting the appropriate tools to execute trades and consequently incur losses. While there are a number of tactics that seasoned traders employ Alpari: A Notable Brokerage for Security and Asset Range to examine and spot patterns in the movement of a specific asset. Intraday trading is riskier than investing, so beginners need to comprehend the fundamentals of trading to prevent losses.

There has been a good resistance that the stock is facing around the level of INR INR 239 which has been tested quite a few times, since the last week of October 2022. Hence a break of this resistance is important before investors try to make an attempt to go long in this counter. Above this resistance, the rally could extend to INR 245 after which a much bigger breakout could materialize. A fall and closing below INR 220 would negate the current bullish view on the stock.

Swing trading allows you to benefit from market movement, say in days, or weeks. Like day trading, it creates profit opportunities for traders as the market move in their favour. Learning to pick the right stocks is the foundation stone on which your trading strategy will base. And, just like in day trading, you would need to pick stocks with high liquidity and potential for strong price and volume shift. Keeping that in mind, let’s figure out how to find stocks to swing trade.

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Their trading plan must include research because it offers the traders an edge. When placing an intraday order, you first state that it is an MIS order, which stands for same-day square-up. If you choose CNC trade, you will be required to pay the whole purchase price in advance. You can profit from lesser brokerage and higher margins if you choose an intraday MIS order and place a trade.

A stock that is sensitive to the news can offer good day trading opportunities. When a stock reacts easily, the news flow may offer hints about how the stock price could move. For example, if you see that the market is rising, you can try to select stocks that offer opportunities to take long positions.

Especially I loved simple words used in this book as the author is also Indian. Features only possible in digital – start reading right away, carry your library with you, adjust the font, create shareable notes and highlights, and more. Kindly update your email id with us to receive contract notes/various statements electronically to avoid any further inconvenience. Pay 20% upfront margin of the transaction value to trade in cash market segment. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. Hence I published it as a book with the title “How to make money with Breakout Trading” even though it is a small book .

In other words, the previous day’s high is an area where sellers dominated the market and price had trouble rising above it. On the other hand, the last day’s low is where buyers have been dominant, and the price had difficulty dropping below it. You can also use technical analysis to find stocks that are breaking their support and resistance levels.

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Minutely study the volatility cycles, and focus on volume surges to correctly predict a breakout. Powerful mix of both trader and investor packs with timely expert advice. The 52-week low is the lowest price at which a stock has traded during the time period that equates to one year. 52-week high refers to the highest market price of a given stock over a one year period. There are several ways to find the best-performing stocks like browsing through company news, chasing the top stocks in the exchange, or following stock indices.

A breakout is a stock price moving outside a defined support or resistance level with increased volume. When stock prices break above the upper band, it indicates an overbought market and signals traders to exit the trade due to a downtrend arum capital review reversal. When prices break below the lower band, it indicates an oversold market and breakout trader enters the breakout trades due to an uptrend reversal. Bollinger Bands help in determining the ideal entry and exit levels for a trade.

If an instrument moves above or below a defined level on a daily chart, that move is not considered a breakout because it occurred over more than one day. Right before the stock price crosses its resistance level at INR 1500, enter the trade to maximize profits. Traders can examine the speed of price changes when price movements approach and break above a resistance line using a histogram that works in contrary to the stock’s prices. Moving average convergence/divergence is a continuation pattern that determines the relationship between a long and a short moving average of a stock’s price. The descending triangle is a downward or bearish continuation pattern that signals traders that markets are going to fall and hence provides them with ideal exit signals. During a downward breakout, traders receive ideal exit or shorting signals as the market is expected to continue falling.

So, many people reached out to me asking for a scanner to shortlist some breakout stocks. An easy way to learn everything about stocks, investments, and trading. The graph will continue to surge higher, touching higher price levels.

They are a price reversal signal and are plotted two standard deviations above and below a simple moving average line based on which you can place successful trade orders. If the financial assets or stock breaks crosses the simple moving average from above, it is most likely going to trend upwards and hence send a long or buy signal to the traders. Trading breakouts usually happen when there is a sudden change in trade volume at the support and resistance levels.

Establishing your targets before you start trading can help you stay on track and exit transactions when it’s time, preventing excessive expectations. Another crucial tactic is to create stop losses so that, should the prediction start to go wrong, you may limit your losses and leave the transaction promptly. Prices since June 2022 have taken support from a 20-week EMA, where recently prices have started to deviate on the upside pointing towards the continuation of the prior uptrend.

It is risky, particularly for newcomers, as it necessitates greater market expertise and experience. ‘Smart Money’ refers to institutional investors, big sharks who have money and information power who give direction and momentum to markets. Investors pick the right stock before making a significant change in the market trends and investing in the direction of momentum. Breakout trading strategy is the easiest day trading strategy; the news is to be quickly acted upon and then watch the market making profits on your roof.

• On the other hand, the last day’s low is where buyers have been dominant, and the price had difficulty dropping below it.
• Above this resistance, the rally could extend to INR 245 after which a much bigger breakout could materialize.
• On the other hand, a bearish MACD divergence occurs when the stock market prices are making a lower high but the MACD is indicating a higher high.

It is risky, especially for beginners, as it requires better market knowledge and experience. Intraday traders benefit by trading stocks which are widely owned. When large buy or sell orders are placed on certain stocks, there is a 3 moving average crossover strategy big effect on the stock price. Day traders should either avoid such stocks altogether or trade them only in small quantities. You can filter the stocks based on movements either in percentage terms or the Rupee value of the stock.

It finds its first support at the 20 EMA and after a failed attempt for a new high consolidates for a few weeks. It finds its support near its 50 EMA, from where it makes an attempt for a new high with increased volume. The high volume candle on 6th August 2019 would have been a perfect entry point for the 52 week trader to go long at 8439 with a stop loss at 8278.

I have shared many such breakout stocks on my Twitter handle, and many people liked the concept. If you look closely at the price graph from that time, you will see an ascending triangle or a rising wedge forming just before the breakout. This is where you identify the entry price level to make the most of the breakout. Support and resistance level needs to be an area where there is a shift in the stock’s supply and demand. To identify a successful breakout, you must be able to identify not only these levels but also the behavior of the stock.