Know some powerful intraday trading strategies

 If you have taken a keen interest in the stock market, you may have possibly heard about ‘Intraday trading’. A good number of brokers have been making it big in this form of trading. So what is it? It refers to selling/buying stocks to make financial gains on the same day. This means individual investors need to square off their positions to earn profits just before the closing the market.

Risky venture

The fact is that intraday trading is filled with lots of risks. Hence, it is best done by those who have been into stock trading for a very long time and has sufficient domain experience, knowledge and technical expertise. This helps optimize gains and reduce losses that otherwise could simply wipe you of you capital just in a day! This is due to its higher volatility.

Top strategies to follow

·         Breakout strategy: Timing is undoubtedly a vital factor to consider especially when buying/selling securities on same day. Being among the best intraday trading strategies, it helps you identify those stocks that have broken out in territories where they usually trade. You can get to know the stocks that are likely to be traded at new price range.

·         Momentum strategy: This strategy allows you to derive the most from market momentum. It involves monitoring appropriate stocks before there occurs significant market trend changes. You may sell/buy securities based upon this change. Stock choice is likely to depend upon quarterly earnings, announcements on takeovers, latest news, etc. It helps you to know news on those stocks that are part of your watchlist. Accordingly you may sell/buy orders.

·         Scalping strategy: This particular strategy allows you to enjoy financial gains derived from trivial changes in price. You may use this strategy to buy/sell commodities. Even those engaged with high-frequency trading prefer this technique. However, technical or fundamental setup is said to have less relevance here. For scalping strategy, price action seems to have more significance.

·         Reversal strategy: High risk is involved with this strategy as you will be making decisions based on calculations and analysis, but against market trend. It is also more difficult when compared to other available methods. The reason is extensive knowledge is desired concerning the stock market. It is also the best indicator for intraday trading if you possess adequate technical knowledge.

·         Go and Gap strategy: It involves identifying those stocks not having pre-market volume. Stocks’ opening price represents a gap concerning the previous day’s closing price. As stock price opens up much higher than previous day’s closing price, it is referred to as gap up. Its reversal is called gap down. This strategy can help identify desired stocks. You can invest in them with the belief that before closing bell, gap will close.

·         Moving avg. crossover strategy: As any financial instrument or stock prices move below/above moving average, then it acts as an indicator of momentum change. As share prices increases over moving average, this is an uptrend and the reversal is downtrend. You may buy stocks or enter long positions in uptrend while in downtrend, sell off your shares or enter short positions.

Follow strategies

To optimize your gains in the stock market, you need to learn a few strategies. Choose the most suitable ones and master them to reduce losses and enhance profits.