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Stock tips: How to earn money through intraday tips
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Stock tips- How to make Intraday calls
Intraday trading is a term which is used to define deals or exchanges which are done within a single day. For short term traders it is very important to study alt the movements of the Intraday price for making trades over the duration of the daily trading session. The notion intraday is on certain occasions also used to define all the securities which are traded during the normal business hours of the market, as for example ETFs and stocks. Whereas in comparison mutual funds cannot be traded within a day as they are to be bought from a dealer.
What do you mean by Intraday?
It is a term which normally depicts the highs and lows of the stock market in a day. As for an example, any statement such as "an intraday high" describes that a certain new high has been achieved in comparison to all other prices which re traded during the same trading session. On certain occasions a new intraday high might be equivalent to the closing price of the stocks.
Traders regularly use real-time charts to closely monitor the intraday movement of priceto gain profits from the short period fluctuations of price.Traders who deal mainly in the short term, on an average use charts ranging from one to sixty minute within a single day. Traders typically use Volume weighted average price on the regular basis in order to increase the efficiency of trade execution. This is done throughout the trading session of a single day mainly by providing an exposure to varied range of prices.
Differences between trading on a Delivery Basis and Intraday basis
When stocks are bought on a delivery basis then the stocks of the company are transferred to the Demat Account. For the transfer to take place usually 2-3days are required. After the transfer has taken place you can do what so ever you like with the stocks. Either you can save them as long term investments for your future or you can choose to sell them the next day.
When it comes to Intraday trading,the transfer of stocks which are bought to your demat accountdoes not take place and before the market closes you have to sell the same number of stocks to remain on your initial position.
Intraday Trading: Some of the Advantages and Disadvantages
One of the most importantadvantages of any sort of intraday trading is that there is no possibility of any impact by a pessimistic overnightnew which can potentially impact the price of the stock on the positions of the prices.For example we know very well that all the pivotal earning reports andeconomic reforms as well as changes in broker hierarchy generally take places before or after the market opens. Trading which are done on the intraday basis also offer certain other advantages such as they provide access to much more leverage ,they have the potential to utilize stop-loss orders and they also provide the trades with much diverse and improved opportunities to learn. There are also certain disadvantages of the intraday trading such as the availability of a very short span of time for the prices to increase and also large commission costs which occur due to the frequent transactions which take place.
Strategies for Intraday Trading
Traders utilize a number of different strategies to trade in a single market session. One of those strategies is scalping which tries to make large number of profits on very little price changes. Another method is range trading, where all the resistance and support levels are utilized to make decisions about buying or selling a stock. One other important method is known as news-based trading, which utilizes the uncertainty created by certain news events to carry out intraday trading.
Why traders prefer Intraday Trading.
One of the main reasons is that the brokerage charges related to trading stocks in intraday tradingare much less than the Delivery trading method. There is also very high margins which are available for Intraday Trading. Most traders also prefer not to carry their overnight positions as there is a certain risk factor involved with that. Any sort of overnight news or any event may affect the prices of the stocks drastically and the market would fall or rise by large amount on the next day.
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