Top Intraday Trading Strategies for Today’s Market

Intraday trading is becoming popular nowadays. It entails buying and selling stocks on the same day. As a result, you would have to close out your open positions before the trading session ends. Experts usually consider it a risky trading strategy. This blog discusses some of the best intraday trading strategies you can use. However, let’s first go through a quick overview of intraday trading.

What is Intraday Trading?

In intraday trading, also known as day trading, traders purchase and sell securities on the same day. They try to profit from market volatility by capitalising on short-term price swings. This strategy requires proper decision-making and thorough analysis, as well as a proper understanding of the stock market’s trends. Intraday trading is a risky trading approach, so one needs to implement proper strategies.

Best Intraday Trading Strategies

Here are some of the top intraday trading strategies.

Momentum Trading Strategy

This strategy capitalises on the volatility of the stock market. Here, a trader purchases intraday stocks for today whose prices are increasing and sells them as soon as they decline. The idea here is that sufficient market force or momentum will keep the price moving in the same direction. Usually, it works best in the morning or after the news, which boosts trade volume. 

Breakout Trading Strategy

A breakout occurs when the stock price rises over a particular level in proportion to the volume traded. There are two levels here. First is support, the lower price level below which prices aren’t anticipated to move. The second is resistance, the higher price level above which prices aren’t expected to rise. 

Traders usually anticipate that prices will advance in the breakout’s direction. Although there is a breakout, the stock returns to the trading range by the end of the day. Thus, it’s preferable to hold off on getting a confirmation until the end.  

Reversal Strategy 

This strategy requires analysis to make financial decisions against the prevailing market trend. It is complex because intraday traders must possess sufficient market expertise. Furthermore, it might be difficult to identify the pullbacks and their strengths precisely. Therefore, there is a significant risk involved with this strategy.

Scalping Strategy 

The scalping trading approach aims to profit from little price fluctuations. Intraday traders frequently employ this strategy when purchasing and selling commodities. Moreover, this strategy is typically used by those who trade in high-frequency trading. While using a scalping method, price action is more important. Those who use this intraday trading strategy must ensure that the stocks they select are volatile and liquid. They should also add a stop loss in their order.

Moving Average Crossover Strategy

When two distinct moving average lines cross over one another, it is known as a moving average crossover. Moving averages are trailing indicators. Thus, the crossover strategy may not capture precise tops and bottoms. However, it can aid in determining the majority of a trend. If the moving averages cross over one another, it may indicate that a shift in trend is soon possible, which might present an opportunity for a better entry. A crossover method does not perform well when prices range, even though it performs well in a volatile market. 

Pullback Trading Strategy

In the pullback strategy, you must buy stocks when their prices decline. The price will make fewer movements in the opposite direction of the primary trend when it is in an uptrend or a downturn. For instance, a stock on an uptrend could retrace and show correction before continuing its major trend. In the same way, a stock whose price is declining may rise for a short while before continuing in the downward trend.

Conclusion 

Intraday trading is a complex trading approach. You can utilise some good strategies for better results. However, there can still be some risk as the stock market is often volatile. Even experienced traders cannot identify trend shifts with perfect accuracy. In addition, be sure to open your trading account on a reliable stock trading app. It should provide an excellent trading platform. You should go with an app offered by reputed firms like BlinkX. It offers all the trading tools to optimise your day trading strategies.