”A vision without a strategy remains an illusion” .Lee Bolman
Best Intraday Trading Strategies. For beginners in 2021
Strategy is the key point in stock market trading or any trading. A trading strategy based on fundamental analysis and technical analysis can help you to achieve a profitable return by going long or short in markets.
Day trading or intraday trading is a type of trading in which you can buy or sell a financial Strategy instrument on the same day or even multiple times over the course of a day.
But it can be a dangerous game for stock market beginners or anyone who doesn’t adhere to a well-thought-out trading strategy.
So, are the best intraday trading strategies to achieve a profitable return.
momentum trading strategy
Momentum Trading Strategy is common in high momentum stocks. The best intraday trading strategy among beginners.
This trading strategy depends on the upcoming news and results. Also, these results can easily move stocks around 20% to 30% every day in both positive and negative ways.
Usually, effective at a starting of a trading day. Or when the news or result of the company is announced also this can result in a sudden increase of the trading value of the security. So, always keep your eyes open.
Points to take care of :-
- First, you need to find your stock early and invest before the market make move.
- Simply hold onto your position until you see signs of reversal and then get out.
- However, you must ensure you’re aware of upcoming news and earnings announcements. Just a few seconds on each trade will make all the difference to your end-of-day profits.
- Don’t trade emotionally.
Tools for Momentum Trading Strategy:-
- Momentum indicator
- RSI Indicator
- Moving averages
- Breakout Indicator
The breakout strategy is a very popular intraday trading. This trading strategy captivates the attention of many new traders. The breakout strategy is a strategy trapped between support and resistance.
To apply a breakout strategy wait for the market to break beyond the support or the resistance. Enter the market as volatility surges after the break.
One of the most popular strategies is scalping. It’s particularly popular in the forex market, and it looks to capitalize on minute price changes. The driving force is quantity. You will look to sell as soon as the trade becomes profitable. This is a fast-paced and exciting way to trade, but it can be risky. You need a high trading probability to even out the low risk vs reward ratio.
Be on the lookout for volatile instruments, attractive liquidity, and be hot on timing. You can’t wait for the market, you need to close losing trades as soon as possible.
Although hotly debated and potentially dangerous when used by beginners, reverse trading is used all over the world. It’s also known as trend trading, pull back trending and a mean reversion strategy.
This strategy defies basic logic as you aim to trade against the trend. You need to be able to accurately identify possible pullbacks, plus predict their strength. To do this effectively you need in-depth market knowledge and experience.
The ‘daily pivot’ strategy is considered a unique case of reverse trading, as it centres on buying and selling the daily low and high pullbacks/reverse.
MOVING AVERAGES STRATEGY
Every stock has a moving average that signifies the trend of the stock price. A simple way to pick stocks for day trading is to look for those who go above or below the moving average as it signifies a change in the trend. If the stock price falls below the moving average, then it is a downtrend and if it goes above the moving average, then it highlights an uptrend. Based on the catalysts behind this change in trend, traders can make decisions.
Stock prices have a short-term moving average and a long-term moving average. When the short-term average crosses above the long-term average, it usually indicates an upcoming strong move and traders tend to buy. On the other hand, if the short-term average crosses below the moving average, then day traders tend to sell.
PULL BACK STRATEGY
A stock usually follows a long-term trend. However, there are times when a short-term trend develops in the opposite direction of the long-term trend. In the pullback trading strategy, traders enter during these short pullbacks and generate profit. It is important to ensure that the short-trend is a pullback and not a reversal. This can be ascertained by looking at the previous day’s trading volumes.
So, if a stock price is trending upwards and experiences a pullback, day traders identify it as a low-risk buy opportunity. As soon as the pullback eases and the stock continuous its long-term trend, they sell and book profits. On the other hand, if a stock price is trending downwards and a pullback happens, day traders sell the share and buy it back when it resumes its downward trend.