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How To Make Money In Intraday Trading?

How To Make Money In Intraday Trading

What is that one thought with which a person starts his/her trading journey? Of course, as your conscience might indicate, the purpose is to make enough money. But, with the same intention, a lot of traders also wonder how to make money in intraday trading?

Intraday trading is a fun, exciting, fast-paced, and profitable segment in the stock market. However, it is often thought that because intraday trading involves a lot of risks, it is not easy to make money in intraday trading.

Whereas it is most convenient to do the same if you keep the right approach, do proper research, and follow rules of intraday trading before diving in.

How To Earn Money From Intraday Trading?

“The real key to making money in stocks is not to get scared out of them.”

The first thing that you should keep in mind before starting with intraday trading is that you should stop fearing it for whatever reasons. It is a fact that buying and selling on the same day and looking for potential gains in a shorter time is difficult, but intraday trading can be really profitable if you follow some tips.

Let us look at some of the points that can help you to make money from intraday trading.

1. Defining the Goals

Have you tried making a to-do list? If yes then you must be familiar with the ease that it brings along. It is also very convenient to execute your intraday trades when you have some predefined goals in your mind.

How will you achieve that?

Make sure that the extra gains don’t overpower your emotions as too much greed can turn your profits into losses.

For example- if you made up your mind that you will make a 5% profit today and then exit, then stick to it. Who knows that waiting for some extra can result in a downfall the very next minute?

Just like the target, it is also essential that you know your risk appetite and then works accordingly. It is crucial to use a stop-loss for intraday trade placed by you. This will help you in avoiding unnecessary losses even when the market is fluctuating against your will.

2. Research

Research is the key requirement to select stocks for intraday trading. You may ask how? So, intraday trading is deeply influenced by a lot of factors including the news, announcements, and other important things around the company or stock.

For example, if the company announces the introduction of a new product after the market hours on Monday, then there are higher chances that the stocks of that company will be influenced by this as well.

If the product is something according to the public demand, then the prices will go up.

Therefore, it is important that you do proper research on the stocks and the other factors around them. You should know the recent market trends and how your chosen stock will react with respect to them.

For this, you can start by reading the best books on intraday trading and enhance your knowledge on the various spectrum of intraday trading.

3. Trade-in Volumes

Quantity matters in intraday trading. Before you get confused, let us understand this with an example so that you get a better idea.

Suppose you bought 10 shares of ₹200 each. On the same day, the price moved up to ₹210. So the profit here is ₹100. Whereas if you would have bought 50 shares of the same, the profit would have been ₹500.

On top of the profit, you will also have to pay the brokerage charges and the other charges as well. By the way, there are no DP charges in Intraday trading applied.

So, in all the profit increases when you trade in volumes.

4. Margin

Intraday trading also gives you the chance to trade even if you don’t have the desired capital. You must be wondering how? So, you can avail thee margin facility, wherein you get extra capital to trade from.

Choice gives you a 5X margin so that you can easily execute your intraday trades. If you have ₹5000 and looking to buy shares that have the current market price of ₹100, and sold them for ₹110 per share, then the profit, in this case, will be ₹500.

If you would have availed of the margin facility, then the total capital would have been ₹25,000. In this case, the profit would have increased to ₹2500.

The margin facility also allows you to make more money in intraday trading.

After the SEBI new rules for intraday margin, most of the traders stop availing of the margin benefits, so here is the question how to do intraday trading without margin? Will it be profitable?

If you are thinking of trading without a margin then be cautious while choosing the stock and trade safe by using that much capital for which you can bear a loss.

5. Technical Analysis

You need to do proper research but with that, you also need to carry out a proper technical analysis of the stock so that you know exactly which stock to pick. Not only this, but you also get the right entry and entry point so that the chances of losses are minimized.

It is also essential to use successful intraday trading strategies to make the best out of the opportunity.

Now there are various technical indicators that you can use for intraday trading like moving averages, ADX indicators, RSI indicators, etc. But the vital thing that you have to keep in mind is the correct usage of these indicators.

For example, if we talk about how to use ADX indicator for day trading, then you have to use it at a time frame of 3 minutes for intraday trading. Otherwise, the indications provided can turn out to be wrong as well.

So, it not only becomes important to use technical indicators but also to use them correctly.

Other than this, you can pick the best combination of technical indicators for intraday trading.

6. Enter At The Right Time

Enter the market at the right time

Intraday trading is all about maximizing profits in less time. Basically, it is a race against time. It is therefore essential to choose the best time frame for intraday trading to make the best out of the intraday trading time.

Although the market hours are from 9:15 AM to 3:30 PM, the early sessions of the market are considered more profitable.

It is the time when the markets are more volatile and also have higher liquidity. It is also highly recommended that you choose the daily charts and that time frame of 5-minutes, 15-minutes, 30 minutes, or one hour.

The beginners can observe the market for the first 15 minutes and then start trading.

So, if you keep all these things in mind, you can easily make money in intraday trading.

Is Intraday Trading Profitable?

Although there are a lot of advantages of intraday trading, a lot of traders still doubt its profitability. Intraday trading can help you make profits ranging anywhere from 2% to as high as 20% just in a few hours.

The trading window is of few hours and the high volatility also poses a lot of challenges and risks in front of the trader. But with the right strategies, approaches, and goals, one can easily enhance the chances of intraday trading profits.

So, if you are taking calculated measures then you can earn enough money to make trading your source of active income.

Also, now that you know that you have made money using intraday, at exactly what time your intraday trading profit will be credited? So your intraday profit settlement time is T+1 days. That means that if you are trading today, your profit will get credited after the market session ends tomorrow.

Conclusion

Most of the traders, in the beginning, are aware of what is intraday trading and no doubt Intraday trading gives the traders a good opportunity to make money. If we sum up all the information that we talked about in this article, the baseline is that with proper research and tips, you can ace intraday trading and earn enough profits.

If you want to make money from intraday trading, then open free Demat account today!

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