Many people want to make money in the stock market. There are six ways to earn money in the stock market
- Delivery Investment
- Intraday trading
- Option Trading
- Future trading
- Short Sale
- Swing Trading
Today’s topic is intraday trading. This is a very popular but most volatile and risky way to earn money online.
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It’s not just a way to make money, a lot of people make thousands of dollars every day trading on this intraday in a few minutes.
However, intraday trading is a little different from ordinary stock market investing.
It’s a bit risky, but trading with the right strategy can increase your profits in a matter of hours. Many even started working as professional intraday traders.
However, before starting intraday trading, there are several things to learn. Just as it can make you a lot of profit in a few hours, it can also make you a loser.
So it is wrong to start suddenly.
This educational article is especially for those who are going to enter the stock market for the first time.
So what you need to know before you start trading, how to prepare, etc much more important information will be discussed here.
And if you follow these, there will be no possibility of loss, but the first intraday trading of your life will be successful.
Table of Contents
# What does Intraday trading mean in the share market?
Intraday trading is not a new concept. Rather very simple as well as common to all.
Intraday trading means you have to sell a stock on the same day you buy it.
Here I would like to raise another very nice point that you can also sell before buying any stocks in this intraday trading. That means without having a stock, you can sell that. This is called ‘Short sell’. It is also very famous among the traders.
The regular stock market is very different from the intraday and short selling. But one thing is almost the same in both.
Intraday trading vs regular share market
Here is what is meant by a comparison
# How to start Intraday trading in stock market
Whether you are investing in a regular stock market or trading intraday, you need to open a demat account to get started.
Just as you have to open a savings account with a bank before you can make a fixed deposit with a bank, similarly, you have to open a special account before entering the stock market. The account is called a Demat account.
Steps of opening a Demat account
A few years ago opening a demat account was very complicated and cost a fee, but now it is very easy and absolutely free to open a demat account.
Some best online platforms to open free demat account
- Upstox
- Groww
- Finity
- Angel broking
- 5paisa
Not many documents are required to open a demat account. No xerox documents required. Now you can open a new demat account online as well as paperless.
You need only 3 things to open
- Mobile number
- PAN number
- Aadhar number
After successful submission, it takes a few hours to open a new demat account. A user gets ‘log in details’ and ‘password’ in his email address as well as via sms.
It is super easy, so why are you waiting for it? Download Upstox or Groww and open your demat account right now.
# Best 3 platforms for intraday trading
Although there are many online platforms for opening a free demat account. However, these 3 apps will be the easiest and suitable for a beginner that you can easily download from the Google Play Store.
Free Demat Account opening apps
- Finity [Read: finity app review]
- Upstox
- Groww
Many beginners have opened accounts in these 3 apps and they are very satisfied. So if you are a beginner, you too should go for them.
# Cost/Charges of intraday trading
There is a minimum brokerage fee for intraday trading. Let me discuss how much brokerage you have to pay on which app.
Finity: if you register on finity and open your demat account absolutely for free, you don’t need to pay any brokerage for 90 days. After 90 days you have to pay only 20 rupees or 0.05% whichever is less. You have to pay a brokerage fee whenever an intraday order is executed successfully.
Groww: on Groww, the brokerage charge is the same as finity.
Upstox: this platform offers you a free demat account for life time with 0 brokerage fee.
When you buy or sell stocks on the regular stock market, you have to pay a much lower brokerage fee.
From time to time these platforms deliver many brokerage related offers to their clients.
However, it should be noted here that when you sell a share in the regular delivery option, whether your broker gains something or not, you will definitely book a profit.
But in intraday trading, whether you make a profit or not, your broker will make a profit.
# Best time period to start intraday trading
The stock market remains open 5 days a week. Monday to Thursday. 9:15 a.m. to 3:30 p.m.
During this time you will be able to trade intraday and buy and sell shares in regular delivery options.
However, all golden times for intraday trading are from 9:15 am to 11 am. Within these two hours, 90 percent of the traders booked profit.
But that is not always the case.
The timing may be different for different stocks. And for right Stocks, previous day research is needed to know which is the golden time.
# Stop loss option for intra day trading
For the convenience of traders and for their profit, all these online apps have been given an advanced option called ‘Stop Loss’.
With this option you can automatically sell your shares at a fixed price. During intraday trading, as long as the stock market is open, the price of almost every stock fluctuates very fast.
So the price you want to sell may have gone up or down. This advanced option has been given with this in mind.
If the price of a stock continues to fall, you can sell your stock at a loss after reaching a certain price. That means stop loss will protect you from more losses.
# Previous day research to make profit
If you want to book a good profit in intraday trading, you need to do a little research the day before. This is called ‘Previous Day Breakout scans’.
Here you will find those stocks which closed above previous high and those which closed below previous low.
In the case of intraday trading, some data plays an important role. Just have a look.
- Previous open price
- Previous close price
- Today’s low and today’s high price
- Stocks volume
- 1 day behaviour scans
In this way these parameters have to be well understood first. From these it is necessary to try to guess which stocks are most likely to make a profit if they trade intraday in the future.
Let’s try to understand the matter. We take an example and give it a try.
Suppose a stock called X has been opening at a higher price for the last two days and closing at a lower price.
Open price=100 and close price=95
Another stock called Y has been opening at a lower price for the last two days and closing at a higher price.
Opening price=100 and closing price=105
Comparing the opening and closing prices of these two stocks, it is easy to see that the probability of profit in a stock called Y is much higher than in a stock called X.
In the intraday sale option, if you set a price limit as high as the profit you target, the stock will be sold automatically if the price of the stock hits that limit. Traders do not have to be too upset.
And this is why we have to look at the parameters first, discussed above.
# How to choose best stocks for next intraday trading
The stock market is a volatile market where in a matter of minutes, the price of stocks either falls or rises. Yet proper analysis helps a lot to choose the right stock.
Tips: It is better to select a stock that is opening at a lower price and closing at a higher price as per the record of the last two days.
# Convert Intra day to delivery
Even after analyzing all the parameters, if there is a risk of loss, you can convert the stocks into delivery options for the next day’s sale. But that is not always possible.
Upstox is the first choice in this regard.
# Minimum Amount needed to start intraday trading
1000 rupees is enough to enter the stock market.
However, the regular stock market, where an investor invests in a stock for the long term, is very different from intraday trading.
1000 rupees is not enough for intraday trading, if you want to book a good amount of profit.
However, those who are just starting out can start with at least 500 rupees.
And there is no upper limit. You can add as much amount you wish to trade for..
Advice: You start intraday with the amount of money that will not affect your life even if it is a loss.
Intraday trading in a glance
An investor in the stock market usually comes for asset creation. Some make long term investments and some buy and sell stocks every day (Monday to Thursday).
Intraday trading is the act of buying shares every day and selling them before 3 pm on the same day.
Intraday trading is much different from the concept of regular delivery stocks. Here a trader gets margin to buy stocks of higher value from brokers and sell them on the same day, there is also a risk of loss.
If you want to make a good profit from intraday trading, you need a little training first. Some Pro Strategies That Can Make You A Successful Intraday trader are
- Previous day open and close price
- News about a share
- Last 1, 2 ,3 days behaviour
- Monitoring highly traded and delivery scans
- Price scanning
- Candlesticks scanning
Intraday trading, however, is very risky. There is no one who has always made a profit from intraday trading, and has not suffered a loss.
Lastly, you need a concrete strategy to make a good profit from intraday trading.
To take entry in this market, you must open a demat account. Earlier one had to open a demat account with an opening fee but now it is absolutely free.
These platforms are famous for opening free demat accounts
- Finity
- Upstox
- groww
Brokerage fees are charged for intraday trading in the stock market.
Intraday trading with a loan should never be done at all. If there is a big loss, you may get into a lot of problems.
I am a personal finance, stock market update, etc.-related blog post writer. Besides, I am a stock market trader. I invest in IPOs, stocks, Etc. I publish valuable posts and information here.
Nice tips thanks a lot