Chapter 9.4: Place better intraday trades: Tips and recommendations

Follow these simple intraday tips to place better trades:

  Choose the right stocks
  Freeze the entry and exit price
  Always set a stop-loss level
  Book profit when the target is reached
  Always close all your open positions
  Do not challenge the market
  Research your target companies thoroughly
  Time the market
  Choose the right platform


Intraday traders experience higher volatility than long-term investors. This makes intraday trading What is intraday trading riskier than stock investing or even positional trading. However, with the right knowledge, you can make the most of your intraday trading money.

Many look for intraday trading tips to improve their chances of success. However, we suggest opting for intraday recommendations, not intraday tips. That’s because what you need is a strong strategy, not tips for intraday trading.

Here are some points that can help make your dream of successful intraday trading come true.


Choose liquid stocks

As you know by now, intraday trading involves buying and selling a set of shares on the same day before market closing, i.e., squaring off open positions. However, for the exchange to execute these orders, there has to be enough liquidity in the market. This is why it’s best to avoid small-cap and mid-cap stocks that may not be liquid enough. Otherwise, your squaring off order may not get executed, forcing you to take delivery instead.

Further, avoid investing all your trading money in a single stock. Experts recommend diversifying your intraday positions across a handful of stocks. This can help balance your intraday trade strategy and minimize your risk. (You can find more ideas on choosing the right stocks for intraday trading here

How to choose stocks for intraday trading

Freeze the entry and exit price

Many stock investors and traders suffer from buyer’s fallacy. This is when the buyer immediately has a change of mind after purchase. The buyer suddenly feels that the selection was not as good as s/he believed at the time of purchase. As a result, they may take a wrong decision once they have bought a stock. You can avoid such mistakes too. All you need to do is decide the entry and exit price before taking a position. This ensures that you have an objective view.


Always set a stop-loss level

It is quite possible that the share you chose falls on the day you trade instead of rising. Therefore, it is important that you decide how low the stock can be allowed to fall before you square-off the position. This acts as a safety net and helps minimize your losses. Most experts would suggest this is the most important tip for intraday trading you’ll ever get.


Book profit when the target is reached

The secret to successful intraday trading lies in the high leverage and margins that traders enjoy . Leverage and margins help amplify profits (as well as losses). But the trick lies in not getting greedy once that target is reached. Avoid falling into the trap, where you hope that the price will keep rising (or falling, if you short-sell). But, if there is good reason to believe that the price is likely to move in the right direction, then adjust the stop-loss accordingly.


Always close all your open positions

Many intraday traders choose to take delivery of the shares if the stock price target they set at the start of the day isn’t met. This may not be a good strategy. After all, the stocks were bought for intraday trading basis market trends and technical analysis of the stock movements. They may not be good enough for a long-term investment. So before converting to delivery, look at the fundamental strength of the stock.


Do not challenge the market

It is near impossible to predict market movements. Often, you may find that all the factors indicate towards a bullish market. Looking at these, you may expect your target stock to rise. But, the market decides to disagree and the stock price does not rise. Bottom line: Do not get married to your analysis. If the market is not supporting a stock, sell it as soon as it hits your stop-loss level. Holding on it in the hopes that the market will see sense can increase your losses. Once again, an intraday trader cannot afford to think like an investor.


Research your target companies thoroughly

Once you have identified a set of stocks to monitor for intraday trading, make sure to research them thoroughly. Find out when any corporate events are scheduled for. These include acquisitions, mergers, bonus issues, stock splits, and dividend payments among others. These could turn out to be as important as being up-to-date with the technical levels Intraday trading time analysis of the stocks.


Timing is crucial

One of the simplest rules of intraday trading is not to take a position within the first hour of trading for the day. This is because volatility tends to be high at this hour. Many experts prefer taking an intraday position between noon and 1pm.


Choose the right platform

Intraday traders make frequent transactions and accrue small gains daily. As such, it is important for you to choose the right platform, one that allows for quick decision-making, execution, and charges minimal brokerage. At Kotak Securities, you can opt for Free Intraday Trading and enjoy zero brokerage on intraday trades across sectors.


A last word

Remember, not to chase after intraday trading tips

Now that you are equipped with the right knowledge, tricks and tips on intraday trading, click here and start trading now.

Find a step by step guide to intraday trading Intraday trading: Step-by-step guide here.

How it helps
  • Use existing bank account
  • Convenience through partnerships
  • Kotak Securities support
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