Strategy for Intraday Trading– In the realm of day trading, also known as intraday trading, numerous strategies abound. These can be momentum trading strategy, moving average crossover strategy, Bollinger Bands breakout strategy etc.
However, among these approaches, the entry and exit method, also known as level-trading, stands out as a premier strategy. It empowers day traders to secure profits with steadfast discipline, steering clear of distractions and temptations along the way.
Why Strategy for Intraday Trading?
Strategy for Intraday Trading decides the fate of our day-trading. Trading intraday without strategy is like shooting arrows in the dark.
Anyone that starts trading in share market, commodity market, currency market, crypto market or in any other financial instruments has one main reason: making huge money on their each trades.
But how to make money and become a successful trader is something most people don’t know.
We enter in the Share Market. Try it by the two different ways one by investment and another by trading.
But after sometime we think intraday trading is substantially more worthwhile in share market. This is the defining moment where we adhered to intraday trading and get trapped.
Situation additionally changes totally when we see our ledger demonstrating an amazing misfortunes (nearly in 90% cases).
Finally it prompts your disappointment/failure.
Wait! Neither is this the only fact nor do you need to worry.
In this post, We are going to discuss about one best and amazing strategy for intraday trading to make money. This strategy is very simple, practical.
After a little practice, you can also use this strategy for short-term investing.
Sounds good? Continue reading.
Best Strategy for Intraday Trading [2024]
Knowing the reasons for failure is an important part of the success strategy. Here I will describe major five reasons for failure in day trading.
Why do Most Day Traders Fail?
1. Lack of knowledge
Most of the individuals join the stock market in their beginning with little knowledge. Whereas the need is that we at least know the basics of the stock market. Then start investing in blue chips stocks with little money.
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But no! We are attracted to other financial instruments such as penny stocks, futures and options, commodity and currency markets, etc. from the very beginning.
It would seem that all of these could possibly give us immense benefits. We enter some of these financial instruments one by one but still with very little knowledge.
2. Don’t follow the trend
The most important factor of strategy for intraday trading is to follow the stock price trends. But we forget to incorporate it into our investing habits.
3. Rejection of past mistakes
Winners can check but failures are defenses and they have a book full of reasons to explain why they couldn’t succeed.
Trying new methods works better for you. Repeating the same activities over and over again, trusting that you will be successful this time, most likely will not make you any closer to your goal.
4. Fatalistic Psychology
A group of businessmen get intoxicated in business. They start enjoying their business. They have no strategy for intraday trading.
And even they forget the real purpose of making money in day trading.
They trade randomly multiple times in a single day. They just get used to intraday trading.
5. Most important- Lack of discipline
Any individual who has achieved anything beneficial has never done it without discipline. Discipline takes self-control, sacrifice and avoiding distractions and temptations. It means staying focused.
So it is necessary that whatever strategy for intraday trading you follow, you must keep a discipline.
Concepts behind the Strategy for Intraday Trading
Success starts with your mindset. Your trading habits and disciplines define it.
There are many day-trading strategies to become a successful trader. But today we will discuss a miraculous way of day trading. You can name it LEVEL- TRADING.
Level trading is an algorithm based calculation. In this, we basically use two basic concepts, one is based on the mathematical calculations of the FIBONACCI SERIES and the other is the graphical estimation of the GOLDEN RATIO resulting in the creation of a miraculous stock calculator for level trading.
These calculations are very much complex but gives you a very reliable strategy for your day trading in any financial instruments.
The reliability of this concept/ calculator can be felt only when you use it. I don’t take any responsibilities. (It’s better for you to follow this approach only after paper-trading or back-testing.)
FIBONACCI SERIES
A series of numbers in which each number is the sum of the two preceding numbers. These numbers are known as Fibonacci numbers and all numbers make a series. These are 0,1,1,2,3,5,8,13,21,34,55,89,144,233,377,610,…………and so on.
GOLDEN RATIO
Golden Ratio, also known as the divine proportion, golden mean, or golden section, is a special number found by dividing a line into two parts so that the longer part divided by the smaller part is also equal to the whole length divided by the longer part.
Golden Ratio = 1.61803398………
Fibonacci Series and Golden Ratios are interrelated which is seen universally in all biological as well as non-biological entities.
It seems the part of the natural dimensions.Many interesting examples can be found as the branching pattern in trees, spiral galaxies, human faces and bodies, DNA, and many more.
“Geometry has two great treasures: one is the Theorem of Pythagoras; the other, the division of a line into extreme and mean ratio. The first we may compare to a measure of gold; the second we may name a precious jewel.”
―Johannes Kepler
Terms Related to the Strategy for Intraday Trading
- SL – means Stop Loss ; a price which protects you from a significant losses
- GC – Golden Crossover ; it tells about a new move of price to start ; it can also be treated as SL
- TDP – Trend Decider Price; it is the price which tells about trend to continue
- SRP – Strong Reversal Price; the level from where trend may reverse
- T – Target Price ; the expected price for profit making as a Target..1,2,3 and 4 (T1, T2, T3, T4)
- Extreme1 and Extreme2 are the extreme level of the price movement of a Scrip which don’t occurs everyday. It occurs when an event or sentiments dominant in the market.
Explanation of the Strategy for Intraday Trading?
During day trading you have two choices at a time : to buy or to sell. I mean there are two types of journey for a price in a small frame of time i.e. UPSIDE or DOWNSIDE.
Wait!
Wait for 30 to 45 minutes when market opens and follows a trend. Please don’t be in hurry because there are much noises/ fluctuations in the price when market opens.
Find Trend?
First of all decide the short term price trend on 5 minutes or 15 minutes day trading chart on the basis of 20 days exponential moving average indicator (20 days EMA) of any scripts of stock market.
Which clearly gives you the direction of market. Here you should also note the level calculated before taking a position.
The chart can be found during live market by simple searching on google.(But I personally use zerodha and investing.com platform.)
In Initial Days
Don’t trade between both TDP range ( for beginners )
Buy Position
Make a buy position or go long only when price crosses above UPSIDE TDP and the DIRECTION OF MARKET (decided previously on the chart) is also UPWARD.
Book profit at T1 / T2 / T3 / T4 / Extreme1 or at Extreme2. If you want to sell or square off at T2 for more profit use SL just below the price of T1.
Similarly if you want to sell square off at T3 use SL just below T2. A similar approach should be adopted till Extreme2 to make a huge profit. But remember Extreme1 Or Extreme2 don’t hit always. Strong trending market is required to hit these levels either side.
Sell Position
Go short or make sell position only when price crosses below DOWNSIDE TDP and the DIRECTION OF MARKET (decided previously on the chart) is also DOWNWARD.
Profit can be made at T1 / T2 / T3 / T4 / Extreme1 or at Extreme2. If you want to buy or square off at T2 for more profit use SL just below the price of T1.
Similarly if you want to sell or square off at T3 use SL just below T2. A similar approach should be adopted till Extreme2 to make a huge profit.
Important
- Every T i.e. target price can be treated as a reversal point also. But T2 is more stronger Reversal Point during both side of journey.
- You can check out Stock Market Calculator to get all target price levels.
Strategy for Intraday Trading with Example of Nifty Futures
To understand better, take a real example of Nifty Futures August series on 25th July 2019. As an overview you can see that Nifty Future made high of 11382 and low of 11280 which was near the Target 4– 11372 during upside and exactly at Target 3– 11280 during downward movement.
In this example, if you wait for the initial minutes, Nifty retains its T4 targets of 11382. Here, If you wish you could take the position, but never mind. You had to start after 30-45 minutes later.
Now when the new trend is set up, you could make a short position which could earn you approx. 100 points till downward Target T3. And again you could trade from downside T3 to upside T3.
This approach is superb. Just back testing and see results.
You can also observe the level of another scripts/securities given in the daily targets.
Here you must note every level can be treated as the both Targets and Stop -losses. That’s why use this approach patiently. Always remember you have to make profit.
Yes, you can understand and learn these all things simply by reading and watching again and again the content provided here.
How to become a successful trader in Stock Market depends upon your efforts and your strategy for intraday trading using technical analysis of charts and technical indicators.
Remember!
Nobody else will help you on this journey. No successful trader ever had it easy.
Were it so easy and simple, the world would be full of success stories. There are hurdles on the way. But I know you can do it.
If you have any query, then you can ask through the comment or contact us page, I will help you as much as possible. Do share please!
