Intraday trading refer to a form of trading in which a trader needs to square of his position the very same trading day i.e position in market can not be held for more than one trading day. Every individual trader has their own opinion about day trading , some are confident to trade on day basis on the other hand some are scared as it is a risky form of trading. To improve trade results often traders rely on usage of experts recommendations on day trading tips, mcx tips and more to earn well while trading in different segments of market. To day trade in market along with capital some really good market knowledge is also required.
Some tips which you can follow to wisely pick stocks for day trading are discussed below :
1) Prefer to trade with liquid stocks only
Liquid stocks generally have high trading volumes and can be bought and sold in large quantity without affecting price. Less liquid stocks do not offer this opportunity to traders because of unavailability of too many buyers.
2) Study relative performance over the index
Identify the companies which are top traded among all and find which of them tend to move in the market primary direction. You can use same intraday charts for this purpose.
3) Trade along the market trend
Trading along the market trend is always beneficial. While picking up stocks understand the trend market is following. If market is bullish trade with stocks which have potential to rise and if market is bullish trade with stocks which are likely to decline.
4) Perform quality research work
It is never recommended to follow what others are doing blindly. Always study different technical and fundamental factors to make a wise choice of stocks.
5) Choose stocks which have high correlation with major sectors
Trading with stocks which have high correlation with major indices and sectors has several advantages like when index or sector is showing upward movement, stocks prices are also likely to rise. Risk and returns can be managed in a better way by trading in such stocks.
Above mentioned guidelines can be followed by traders to pick up good stocks from trading point of view. Though day trading is a risky business , traders can earn well here by planning a wise trading strategy and carefully picking stocks to trade with. Financial advisory services providers can also be consulted to get suggestions on trading tips. Though extra cost is involved to get such experts advise but it helps to plan trade in a better manner and further accomplish trading goals. Day trading is all about timing and traders should understand the significance of right timing then only they can make good profit from small price movements.