• HDFC SEC
• 05 Jan 2023
• Knowledge Centre

HDFC SEC, Tester

Trading and investing in the stock market, are very different from each other. While investing is associated with growing your wealth in the long term, trading is making quick money from the short-term price movements in the market. One of the most common types of trading is intraday trading or day trading. Before knowing some intraday trading tips for beginners, it is essential to understand what it is and how to do intraday trading.Note that you will essentially require a Demat and Trading account to be able to do Intraday trading. Hdfc Sky by Hdfc Securities, allows investors to Open Demat Account with flat brokerage and low fees for a cost-effective trading experience.

What is Intraday Trading?

Intraday trading is the practice of buying and selling stocks or other securities on the same day. It is also called day trading. The stock prices keep fluctuating throughout the day. An intraday trader aims to make profits from the short-term price movements of the stock.

The trader will first buy the stock if its price is expected to rise and then sell in it on the same day before the market closes. If he expects the prices to fall, he will first sell the stock and then buy it later before the close of trading hours for the day. Hence, intraday trading does not involve taking delivery of the stock as the position is squared off the same day of the trade.

Intraday trading guide for beginners

Beginners in the stock market should take care of certain points before trading. Here are some of the intraday trading tips for beginners:

Start Small

It is advisable not to take aggressive bets in the initial stages of trading. Begin with a couple of stocks and gradually increase the trade volume and value with your experience and skills.

Avoid Emotions

Human emotions can adversely affect trading decisions. Greed and fear are the two important elements that can be detrimental to any trade. Trading decisions must be based on logic and rationale. An intraday trader has to be vigilant about the market and it is essential for him to remain calm and kill anxiety.

A Stop Loss Is Must

It is always better to keep a stop-loss order while trading. It helps in minimising the losses when the prices move against the expectation.

Plan a Proper Entry and Exit Strategy

An intraday trade depends upon the prevailing market trend. A trader must identify the trend patterns and plan the entry and exit points that will help them maximise the profits and minimise losses.

 

Don’t go broke

In your trading journey, you will make suffer some losses. But, ensure that your trading capital remains intact over time and the losses do not significantly affect your living standards. Avoid huge leverage and loans to finance your trading. Keep losses within bounds and avoid excessive speculation. Intraday trading is risky, hence, invest only what you could afford to lose.

Research and Evaluate

It is advisable to conduct thorough research and analyse all the stocks you want to trade along with prevailing market conditions before trading. Also, keeping a track of your performance - your winning and losing trades - will help you avoid repeating mistakes and take better trading decisions.

 

  

Note that you will essentially require a Demat and Trading account to be able to do Intraday trading. Hdfc Sky by Hdfc Securities, allows investors to Open Demat Account with flat brokerage and low fees for a cost-effective trading experience.