When traders purchase and sell shares in a day and close all the trade by the end of the same trading day, it is known as intraday trading. intraday traders want to make a profit from small price fluctuations in stocks by using in leverage and margin. the period of time that an intraday trader holds the position from a some second or few minutes to a day. Trading stocks like this need huge amounts of capital to be invested in stock chooses so that the small change in value makes it useful.
There are several types of method that intraday traders may apply to trade on the stock market.
Now Here We Discuss Three Method of Intraday Trading.
Scalping Method -
Scalping is a way of investing that is very successful in intraday trading. It includes selling a stock pick approximately quickly the trade turns successful. This happens after the stock rises by just some cents. It may not seem important, but do a number of times and with huge amounts of money, it quickly adds up while at the same time keeping a strict exit plan to limit your losses.
Momentum Method -
Momentum trading means stock picking shares that are performing in an important way on high volume. Traders look to get the advantage of the stock picks momentum and take it out up till the point where a reversal may happen. Intraday trading using the momentum method can see the trader hold onto a stock for some minutes to a day depending on how the stock change. The trader will look to know a breakout, which is his sign to purchase the stock. Going the bid rate is not so big, and a trader may let some breakouts pass by before he takes in through market order. If the stock should quickly reverse its way, the trader will sell out quickly and cut his losses. They do not wait to see if the stock will go up again; this could show unsafe and see them lose capital.
Technical Analysis Method -
Technical trading is still a different type of intraday trading. Traders who do this technique look at technical analysis to define what way the stock or stock market will change in. They do chart analysis on stock charts and actual data on cost and volumes of a particular stock. They then look to know similarities in the way the stock traded in the history with the present. By doing this, they look to see areas where a stock may reverse its direction. These traders use multiple technical indicators to support them predict how the stock price will move in fewer minutes to fewer hours.
Many research firm give free intraday tips on technical analysis basis.