Intraday Trading – 19/9/23 Powerful strategies

Introduction

In today’s fast-paced financial world, intraday trading has gained immense popularity. This form of trading, also known as day trading, involves buying and selling financial instruments within the same trading day. It offers the potential for quick profits, but it comes with its own set of challenges and risks. In this comprehensive guide, we will delve into the intricacies of intraday trading, equipping you with the knowledge and strategies to navigate this exciting yet volatile landscape.

What Is Intraday Trading

Intraday trading, often referred to as day trading, is a trading strategy where traders buy and sell financial assets like stocks, currencies, or commodities within the same trading day. Unlike traditional investing, which involves holding assets for an extended period, day traders aim to capitalize on short-term price fluctuations.

The allure of intraday trading lies in its potential for quick profits. With leverage and ample liquidity, day traders can take advantage of even the smallest market movements to turn a profit.

Essential Intraday Trading Strategies

  1. scalping
  2. momentum trading
  3. breakout trading

Risk Management in Day Trading

Set Stop-Loss Orders

Stop-loss orders are essential for limiting potential losses. Determine the maximum amount you are willing to lose on a trade and set stop-loss orders accordingly.

Never Risk More Than You Can Afford to Lose

Day trading involves risks, and it’s crucial never to risk more than you can afford to lose. Avoid using funds earmarked for essential expenses or long-term investments.

Day Trading Strategies

  1. Stage 3 Bullish Breakout
  2. Stage 3 Bearish Breakout
  3. Stage 3 Failed Breakout – Bullish
  4. Stage 3 Failed Breakout – Bearish

Lets discuss these Strategies now.

Stage 3 Bullish Breakout

Intraday Trading
How To Day Trade For A Living

Lets see some characteristics of this strategy ,then we shall come to know how to read candlestick chart for day trading.

  1. Prior trend should be uptrend.
  2. one higher timeframe ( hourly / daily ) trend should be uptrend.
  3. Timeframe – 5m
  4. Check volumes on breakout candle and entry candle – should higher.
  5. Consolidation after breakout should be at least for 4-5 candles.
  6. No major resistance should present on one higher timeframe chart.
  7. Long trade can be executed on closing of entry candle.

Lets see this features on a price chart.

How To Day Trade For A Living

See above chart of nifty 5m. Prices gave breakout on 1st bar of the day and rose after opening. We can see consolidation of price for 18-20 bars ,then gave a breakout in the direction of the main trend. We can take long entry on closing of the entry candle. Stoploss can be placed at recent swing low and target set to 1:1 . Some traders hold position till day if there is no any nearby resistance and keep trailing their stop-loss. Lets see bearish version of this strategy and learn how to read candlestick chart for day trading.

Stage 3 Bearish Breakout

How To Day Trade For A Living

Lets see some characteristics of this strategy ,then we shall come to know how to read candlestick chart for day trading

  1. Prior trend should be downtrend.
  2. one higher timeframe ( hourly / daily ) trend should be downtrend.
  3. Timeframe – 5m
  4. Check volumes on breakdown candle and entry candle – should higher.
  5. Consolidation after breakdown should be at least for 4-5 candles.
  6. No major support should present on one higher timeframe chart.
  7. Short trade can be executed on closing of entry candle.
How To Day Trade For A Living

See in the above price chart . Price breaks previous day low on first bar and kept falling. Then we can see consolidation for around 20 bars. Short entry can be taken on breakdown bar after consolidation. Stoploss can be placed at recent swing high. Target may be 1:1 . Some traders hold position till day if there is no any nearby support and keep trailing their stop-loss.

Stage 3 Failed Breakout – Bearish

How To Day Trade For A Living
  • There should be a downtrend on higher timeframe or prices should be at resistance zone on higher TF
  • consolidation should be at least 3-5 candles after breakout
  • There should be a big size red bearish bar with a good volume when price enters previous day range after breakout
  • Short trade entry can be taken below the red bar low.
  • Stoploss may be placed at previous swing high
  • Target can be set at previous day low.
  • Timeframe is 5m for trade entry
How To Day Trade For A Living

Stage 3 Failed Breakout – Bullish

How To Day Trade For A Living
  • There should be an uptrend on higher timeframe or prices should be at support zone on higher TF
  • consolidation should be at least 3-5 candles after breakout
  • There should be a big size green bullish bar with a good volume when price enters previous day range after breakout
  • Long trade entry can be taken above the green bar low.
  • Stoploss may be placed at previous swing low.
  • Traget can be set at previous day high.
  • Timeframe is 5m for trade entry
How To Day Trade For A Living

FAQ – Intraday Trading

  1. Can I day trade for ( Intraday Trading)a living even with a small amount of capital? Yes, it’s possible to day trade with a small amount of capital, but it comes with risks. Successful day trading requires adequate capital to manage losses and handle margin requirements. Start with an amount you can afford to lose and gradually grow your account with profits.
  2. Do I need a formal education to become a day trader? While a formal education can be helpful, it is not a strict requirement. Day trading requires understanding financial markets, technical analysis, and risk management. You can acquire knowledge through self-study, online courses, and trading communities.

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