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Day Trading: Approach To Intraday Trading For Beginners

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Day Trading: Approach To Intraday Trading For Beginners

In the hope to get sky-high returns in the stock market, new as well as experienced investors, trade through the intraday segment. Despite the risk involved in day trading, investors make decisions to square off the positions. The stock market suggests numerous ways to invest and trade to investors. Every stock market trading activity depends upon the financial goals. Short-term speculative profit generation goals can be fulfilled through trading during a single session. Every new investor, who has a desire to earn short-term speculative returns, needs to understand the approaches that he or she can use while trading in the stock market.

 

Intraday trading: A path to earn speculative profits

Day Trading: Approach To Intraday Trading For Beginners

An intraday trading comprises a buying and selling activity that is based on the same stock or security. It comprises squaring off the positions of traded security in a single day period. In simple words, intraday trading can also be understood as speculation that ensures high returns due to market fluctuations. It’s a risky activity as it involves extraordinary returns along with unexpected losses. Before entering an intraday segment, one should decide the amount of investment that he/she can afford to lose in case of negative fluctuations.

 

How can a beginner investor start intraday trading?

For every investment and trading transaction, an online trading account is a basic necessity. To trade in the stock market, a trading account offers a digital platform to execute the transactions. To open an account for day trading, a beginner investor needs to comply with the documentation rules. Every broker requires valid documents to initiate the trading. Once the broker issues a unique client number, then investors can buy and sell any security from the stock market.

 

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Approaches to intraday trading for beginners:

As a new investor in the stock market, you can employ various approaches to earn the maximum possible return by reducing the risk. Due to a short period of squaring off the positions, this trading can impose a high level of risk in case of the right strategies. You must be aware of the right approach that can lead to high returns and capital gain instead of losses. As an investor, you can apply the following approaches or strategies:

 

  • Select highly liquid stocks:

Highly liquid stocks are the securities that remain in the market trading always. These securities always float in the market. Generally, large-cap stocks are highly liquid that you need to select in order to perform intraday trading. Highly liquid and floated securities have the capacity to earn maximum profits by selling the stock that you bought the same day. 

Day Trading: Approach To Intraday Trading For Beginners

 

  • Setting up of price range to square off the positions:

Involvement of high risk in day trading makes you more conscious regarding the selling of securities. In this case, you need to set your buying price and a selling price that you will follow while trading. Due to fear of loss, investors sell their securities at prices less than the targets.  It brings down the opportunity to make profits in case of the incremental trend of stock prices. Setting up an entry and selling price before trading ensures expected benefits.

 

  • Don’t try your luck: Earn profits at your pre-decided target level

As a Beginner, you might have a hope to earn the maximum possible return with just the first transaction. Instead of random buying targets for buying and selling, you should execute with target levels. Once you reach your desired level, you should square off the position. Desire to earn extra return may or may not prove beneficial due to random moves of the market.

 

  • Use proper technical analysis:

To know the best time to square off the position, you need to keep an eye on market moves every time. Every moment of ups and downs can be predicted through technical analysis. You should monitor trends and patterns until reaching the target level for selling. 

 

These approaches can come up with better returns and capital gain in intraday trading. Important thing is to apply the approaches with due concentration. You can fulfill your short-term financial goals with these simple strategies and approaches.

 

 

Read more on Finance related stories in The Weekly Trends magazine.

Shailendra Kumar is an experienced Financial Consultant and Tech Reviewer who has 6+ years experience in the field of finance, business and technology. He is very passionate to write about Finance, Business, Technology, Gadgets, Shopping, Fashion, Lifestyle, etc.

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