This occasionally happens in thinly traded penny stocks as well as thinly traded index and stock options. Sometimes the spread between the bid and ask prices is also wide enough which affects trading costs. They cannot exit due to illiquidity or circuit limits. There are times when traders are stuck on one side of the trade. Traders should avoid highly volatile and thinly traded stocks. The volatility should not come at the cost of liquidity as liquidity is crucial for entry and exits during the day. Low volatility means fewer trading opportunities. High volatility means large price movements during the day that translates to more trading opportunities. Volatility and liquidity are also very critical for intraday trading. Samco app helps you track corporate events and news flow in your stocks easily. Irrespective of the outcome, it is good to remain informed of any scheduled events. Such events bring both challenges and opportunities with them. This checkup should be done on a routine basis. If trades have been taken on some technical setup, it is prudent to check if there is any corporate event scheduled on the same stock. Managing multiple trades can become quite complex as long and short trades would be open in different stocks. They should also limit the maximum number of open positions. Traders must first decide the risk they are willing to take per trade. Factors to Consider While Picking Best Stocks for Intraday Trading There are various things to keep in mind while determining the best stocks for intraday trading. Hence, it is very important to trade based on a trading plan and not trade based on emotional bias and gut feelings. ![]() He might even cut profit-making positions early. Similarly, recent losses or streak of losses can lead to taking undersized positions despite the right trading setup. He might take big risk or hold losing positions for a longer time in the hope of breaking even. High optimism or overconfidence due to large profits or long winning streaks can lead to taking oversized positions. A trader’s decision-making ability is highly impacted by his state of mind. Trading is a stream where profits and losses affect human psychology. Other factors such as trading plan, money management, and risk management also affect a traders’ profitability in the long term. One can also take leveraged positions in stocks that are not available in F&O segment.Įven though intraday trading eliminates overnight risk, there are other risks such as sudden news during trading hours, illiquidity in the instrument, and fluctuating volatility of the instruments. Intraday trading is possible in any segment whether it is cash, futures and options (F&O), commodity or currency derivatives. People who were restricted to their homes picked up day trading as a source for generating income. Intraday trading got a booster during the Covid-19 lockdowns as well. The trading costs have reduced drastically as discount brokers charge only nominal fee compared to traditional brokers. ![]() There has been a sharp surge in intraday trading volumes in recent years due to rising number of demat accounts. He does not carry any overnight risk that can affect his profits. ![]() In short, a trader closes his open trades before the closing of the trading session. What is Intraday trading? Intraday trading means a trader is buying and selling shares or other trading instruments on the same day to benefit from the stock price movement during the day. ![]()
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