Want to learn top strategies for intraday trading used by professional traders? This guide will teach you how to get started with intraday trading strategies that actually work in 2021.
Intraday trading necessitates a unique range of skills.
You must be able to operate under pressure, have a strong trading strategy, and be willing to accept losses.
Intraday trading necessitates discipline and a willingness to look at the larger picture rather than fixating on a particular trade.
This intraday trading guide covers basic and advanced intraday trading strategies.
Before we discuss the top strategies for intraday trading, here are few intraday trading tips to assist you in taking the correct move.
- Intraday Trading Tips
Understanding The Top Strategies For Intraday Trading
- 1. ORB or Opening Range Breakout Strategy
- 2. Intraday Trading Strategy Based on the News
- 3. Intraday Momentum Trading Strategy
- 4. Breakout Trading Strategy
- 5. Scalping Intraday Strategies
- 6. Crossover Trading Strategies
- 7. Pivot Point Intraday Trading Strategies
- Final Thoughts
Intraday Trading Tips
Select Liquid Stocks Only
Intraday trading means buying and selling stocks or any other securities on the same day before the market closes.
For intraday trading, choose two or three large-cap stocks that are heavily liquid.
Small to mid-cap stocks with low liquidity can be avoided.
We recommend not putting all of your money into a single stock.
You may spread your intraday positions across 2-3 different stocks.
This will assist you in balancing your intraday trading approach and reducing risk.
Right Entry & Exit
Before placing the purchase order, you must first decide your entry level and target price.
Before you make a trade, give it some thought so you don’t regret it later.
Stop Loss is your Friend
It’s also likely that the stock you chose to buy at a certain price drop instead of rising on the day you trade.
You’ve to determine how deep the stock will go before you square off your position.
It’s also crucial to keep track of the profit and loss of each trade.
Never Trade Against the Trend
Never trade in the opposite direction of the market trend.
Many professional traders suggest to trade with the trend.
‘Let the trend be your friend’
Use simple trading approach to lower the frustration of trading.
Let’s get started!
Understanding The Top Strategies For Intraday Trading
The following are some of the most common intraday trading strategies:
1. ORB or Opening Range Breakout Strategy
ORB or Opening range breakout strategy has gained a lot of popularity among traders.
A majority of traders consider the Opening Range Breakout, also known as the Early Morning Range Breakout, to be their livelihood.
By signaling an exact entry point, the opening range breakout aids in the development of a solid trading strategy.
However, keep in mind that this trading method necessitates experience and expertise before you can make a profit.
When the market opens, this strategy assists traders in getting the most out of the rapid action generated by large-scale selling and buying orders.
The initial timeframe of 15 to 30 minutes trading range is generally treated as the best intraday trading time because it is suitable for the opening range breakout.
2. Intraday Trading Strategy Based on the News
One of the most popular form of day trading is news-based trading.
Traders that engage in this method of trading do not focus on the technical chart; instead, they wait for information to push the prices.
This information could consist of:
A corporate statement of new products or earnings; or even a false rumor of what could or may not happen in the market.
Traders who succeed in this strategy aren’t really experts in fundamental analysis, but they do have a good understanding of how the news might affect the stock prices.
Traders put orders when they see the right opportunity at the right moment by focusing on relevant news reports.
However, before you start trading in this manner, you should be aware that this method of trading approach is potentially riskier than others.
While it guarantees high returns on investments in a single day, if you are unaware of the best free intraday tips or how to interpret news and announcements, you might lose a lot of money.
3. Intraday Momentum Trading Strategy
Search for opportunities to profit from price spikes.
This is one of the most effective intraday methods for maximizing profits.
It’s a intraday technique in which traders recognize stocks that are expected to go up or down on regular basis.
Traders buy these stocks just before making a move and keep their positions open until the market stops moving in the desired way.
4. Breakout Trading Strategy
Breakouts happen when the price crosses a specified level on the chart with increased volume.
Look for support/resistance breakouts and high/low breakouts to profit from.
After the Stock breaks above the resistance, a trader enters a long position.
Alternatively, if the stock breaks below the support, you should enter a short position.
Intraday Breakout Trading Strategy Advantages
Trading breakouts has a number of advantages. As an alternative,
Momentum is on your side – Breakout trading encourages you to enter a trade with momentum on your side.
Catch big movements – If you trade pullbacks, it’s possible that they’ll never come back at that level.
5. Scalping Intraday Strategies
Scalping is a form of trading that focuses on making fast, easy gains.
Traders focus on profiting from minor price changes, with profits taken as soon as a trade becomes profitable.
A scalper deals in large quantities and exits with a small profit.
A scalper must stick to their trading system consistently in order to prevent a heavy loss that could wipe out dozens of profitable trades.
A stochastic oscillator, moving average, parabolic SAR, or the RSI can all be used for scalping.
6. Crossover Trading Strategies
Moving averages (MAs) are a common technical analysis technique that smooths out market differences by averaging them into a single line.
MA lines, despite being a lagging predictor, can be used to forecast the overall market trend as well as possible reversals.
Moving averages can also work as support and resistance levels.
MAs are indicators in themselves, as well as a basis for other useful methods like MACD.
For example, a 20-period SMA line would measure the current value of SMA by adding the last 20 closing prices and dividing by the number of periods (20).
The line is drawn by connecting the price points in a series.
The 50-SMA and 200-SMA crossover strategy is one of the most common trading strategies.
A golden cross is formed when the 50-day SMA crosses over the 200-day SMA.
To look at it another way, it’s a call to take a long position.
When the 50-day SMA crosses below the 200-day SMA, therefore, it is a short signal.
This is the opposite of the golden cross, also known as a death cross, which can be used as an exit method.
7. Pivot Point Intraday Trading Strategies
In both stock and commodity markets, pivot points could be used.
Pivot points are used by traders to decide the area of support and resistance.
The pivot point, on the other hand, serves as the primary support and resistance.
Intraday Trading using the Pivot Points
The pivot point is the average of the high, low, and closing prices from the previous day.
The market is called bullish if it opens or maintains above the pivot level (PP), while markets below the pivot level (PP) indicate a bearish trend.
You can buy the stock with a target of R2 if it breaks resistance 1 or R1.
You will short the stock with a target of S1 if the opening price is lower than the PP.
We went through the seven strategies for Intraday Trading in this post.
Here are a few important points to remember from this article:
Intraday transactions are ones in which the purchasing and selling activities are done on the same day.
Intraday trading is defined by liquidity, volatility, volume, patience, and consistency.
If you want to be a good intraday trader, you must devote 100% of your time and effort.
Traders must still maintain a high level of risk control.
Always remember stop-loss and trend is your friend.