Top 3 Intraday Trading Strategies

12 במרץ

To get success in intraday trading, requires dedication, hard work, patience, quick wit, and immense knowledge. Successful day trading involves 10% execution and 90% patience.

To gain expertise in day trading and honing trading skills, it takes a fair amount of time. There are a number of Best Intraday trading strategies available for trading, but the success or failure of the strategy completely depends on the market. Maybe one strategy works in today’s market condition but may not work according to the next day’s market condition. Not only, does the movement of the market, but the intraday trading strategy also depends on the trading styles of the trader. It also varies at different times of the day, depending upon how the market is behaving.

Here, in this post, you will find Effective Day Trading Strategies, which you can use for intraday trading.

Intraday Trading Strategy :

1. News Based : News-based trading is the most traditional form of day trading. This type of trader doesn’t focus on the stock price and volume charts, they wait for information that will drive the prices.

The information may come in the form of a company announcement about earnings or new products; a general economic announcement about interest rates or unemployment; or just a lot of rumors about what may or may not be happening in a given industry.

Traders who do good with news-based trading, usually have some understanding and knowledge of the markets. These types of traders are not expert analysts or fundamental researchers, but they have enough knowledge about what kind of news would be in-favor or what would be taken poorly by marketers. They also pay attention to a few different news sources and also whenever they find the right opportunity, they place the order at the right time.

The downside of news trading is that there may be few and far good events; more often, the hype is already built into the price by the time you watch it. Many news traders turn to the scalp while they wait for something to create a little excitement.

Before you start news-based day trading, one thing you should keep in mind is that, this type of trading strategy is very risky as compared to other strategies. It also gives high returns on investment within a day.

2. Gap + B.B. (S20,2): This strategy is useful when the stock/ Index opens Gap Up or Gap Down.

After the gap, the stock shows a potential reversal sign, which can observe by the place of a candlestick or by a heavy volume event. You can fade the action and go in the opposite direction of the gap with a profit target at the start of the gap.

Rules:

• Entry between 9:30 to 10:00.
  
• Exit at stop-loss or at 3:25.
  
• Bollinger band strategy is 20,2
  
• 30- minute time frame is required.
  
• Big Profits and Small losses.
  
• No need to trade every day.
  
• Helps to stay away from the Sideway market.
  

Example for Buy Trade:

• In this strategy, the stock should be open with Gap up or Gap down.
  
• The First 30-minute candle should be untouched from the lower band.
  
• As you can see in the above image, the first candle opens with a gap down and it is below the lower band.
  
• The high of 1st candle is also untouched by the lower band.
  
• Go for buy trade when the high of 1st 30-minute candle is a break.
  
• Stop-loss = low of the 1st candle.
  

Example for Sell Trade:

• The stock opens with a gap up and the 1st candle’s low is not touched with the upper Bollinger band.
  
• As the low of the first candle is broken, enter in to sell trade.
  
• Put the stop loss at the high of the first candle.
  

Note: This strategy gives best result for Nifty and Bank Nifty.

3. Morning ORB: The early morning range breakouts are also known as opening range breakouts. It is like bread-butter for many trades. The trading opening range takes skill and practice until you can turn a profit.

The early morning range breakout help traders to take advantage of the violent action from the flurry of buying and selling orders when the market opens.

Trading Range
The first 20 to 30-minute trading range is suitable for an opening range breakout. While you start trading practice using this strategy, it is recommended to start with a very little amount of capital.

The stock you select for the trade should be within a range, which is smaller than the average daily range of the stock. The upper and lower boundaries of the range can be identified by the high and low of the first 30 or 60 minutes.


Early Morning Range Breakout and Volume
The idea for go short on a break below or going long on a break above resistance is not as easy as you think. First, you need to understand the relationship between volume and price.

Volume and Price must be in harmony. When you short or long a stock, which has happed down or gapped up it must open with heavy volume and then retrace on lighter volume (indicating a lack of buying). Which confirms that sellers/buyers are in control.

Volume Is very important for every type of breakout which confirms the breakout before entry. If the stock price breaks the morning Support/resistance level with low volume, there is a high chance of a false breakout.

The image below explained that high volume during a breakout is likely to push price through key resistance.



In this 15- minute chart, you see that after a break of early morning resistance with high volume, the price starts increasing.

Volume is very tricky so you need to be able to predict the support/resistance levels accurately in order to find out good volume breakouts and set proper profit targets.

Disclaimer: The Intraday Trading Strategies discussed in this post is for education purpose only. We are not responsible for any Profit or Loss you made using these strategies. We hope that you like our blog post on Intraday Trading Strategies.