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Apr 13, 2018

Best Strategy For Intraday Stock Trading 2018 (Latest!)

Are YOU tired and confused with different trading strategies, then you can see some of the best strategy for intraday stock trading explained in this article.

best strategy for intraday stock trading

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Best Strategy For Intraday Stock Trading

In this article, you will get best strategy for intraday stock trading, which you can backtest with your favorable stock for day trading

First, let me answer some questions on trading:

What is intraday trading?

Day trading is nothing but speculating in securities which is also called equity and scripts.

Where traders buy at low and sell at high in financial instruments within the same trading day. Which avoids the overnight risk of holding the equity.

Why should you do intraday trading?

Intraday day trading provides greater opportunity to make a profit from volatile stocks, which requires a person to backtest the strategy on all maximum number of day to see the risk to reward ratio.

Should we backtest the intraday strategy?

Absolutely, because not all strategy performs well during a bull market or bear market so you need to have few refined strategies which can give you profitable trades.

Can we use options for day trading?

I would not suggest you test your hard earned money with derivatives which come with higher risk and higher reward.

I have shared an easy technique on how you can avoid false signals in your day trading, so watch this complete video where I have used Stochastic Indicator in a 15-minute time frame.

Best Intraday Trading Strategy India

The best trading strategy should be based on a technical set up which should be easy to analyze and must have the following as in built-in indicators.

Technical indicators must be strong enough to help you avoid false signals out of your chosen stocks volatility.

So volatility is one thing, which can defeat best and experienced traders also with well-known strategies.

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Trading With Leading Indicator

Identifying breakout from the first 15-minute candlestick, so to try this method you have to be in front of a system by 9:30 A.M

You can use the live chart from familiar website which provides a free live chart of your chosen stock.

Trading With Leading Indicator
Image credits:

From the above image, we can observe that price of Tata Steel crossed low of its first 15-minute candlestick.

I have highlighted the section so explaining this further

Tata Steel 9:15 - 9:30 A.M OHLC
Open - 600
High - 604.40
Low - 600.05
Closed - 602.70

Considering the above information we can set up a potential trade when the price of this stock crosses the first 15-minute high or low.

So we had entered a short trade at third candlestick which is a red candle and crossed low of 600.05 at 9:45 A.M

Observe carefully that Stochastic RSI was indicating a trend change by blue line crossing the red line.

So considering the price making lower and indicator supporting this action we took the short trade at 600

Exited this trade at 593 around 1:45 P.M, so let us calculate the profit from this trade:

(Trade Entered at) Rs.600.00 - Rs.593.00 (exited price) = Rs.7.00 profit per share

So when we calculate this with a minimum of 500 quantity then profit was exactly at Rs.4500.00

So hope you have understood the potential of this simple trading method

No Trading zone

You have seen many trading strategies but there is something which you should avoid.

So I will share with you that important zones which should be avoided on your trades.

Intraday Stock Trading

From the above image, you can see that Stochastic RSI whenever it goes to overbought zone or oversold zone.

It bounces back by next few candlesticks.

So if you observe properly whenever this leading indicator is at overbought or oversold zone the prices are fluctuating.

Most traders fail to take profit when they enter in overbought or oversold zone.

So things are clear and it is an learning that you have to avoid taking fresh trades in these zones.

When Stochastic RSI is in the overbought zone it bounces back due to no strength left with buyers and sellers take this opportunity and they bring the prices at lower levels.

Accordingly, when this indicator is at oversold zone the sellers lose their strength and prices tend to go higher for next few candles.

You have to plan your trades based on the strength of buyers or sellers which requires practice, observation.

Try making similar observations with RSI indicator you will see same results.

Stock Market is a game between buyers and sellers analyze and observe where they enter and exit by using above said method. 

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