10 Steps to Build The Best Intraday Trading Strategies (2024)

FAQs

10 Steps to Build The Best Intraday Trading Strategies? ›

The 3-5-7 rule is a simple approach to managing your trades. Here's how it works: as your trade gains value, you take profits at three different levels—3%, 5%, and 7%. This method helps you lock in profits gradually, instead of waiting and hoping for a bigger win that might never come.

Understanding the 9:20 AM Short Straddle Strategy

The 9:20 AM short straddle strategy capitalizes on the initial market volatility that often occurs right after the opening bell. This strategy involves selling both a call option and a put option simultaneously.

You should always set stop losses to help mitigate risk in your intraday trading strategy. If the stock price reaches your set stop-loss price, the position will be exited immediately. This action helps prevent significant losses from a sudden move in the wrong direction.

1. What are the best indicators for intraday trading? The best indicators for intraday trading include Bollinger Bands, Relative Strength Index (RSI), Exponential Moving Average (EMA), Moving Average Convergence Divergence (MACD), and Volume.

The shooting star candlestick is primarily regarded as one of the most reliable and one of the best candlestick patterns for intraday trading. In this type of intra-day chart, you will typically see a bearish reversal candlestick, which suggests a peak, as opposed to a hammer candle which suggests a bottom trend.

These retracement levels provide a good opportunity for the traders to enter new positions in the trend direction. The Fibonacci ratios, i.e. 61.8%, 38.2%, and 23.6%, help the trader identify the retracement's possible extent. The trader can use these levels to position himself for trade.

Intraday Trading Formulae:

We need to add them up as: H + L + C = X Now, the derived value must be divided by 3: X/3 = P (which is called the pivot point) Then, multiply P with 2: X/3 X 2 = Y It is assumed that a stock moving above the pivot point is likely to continue its journey till the first resistance level.

A common practice is to set the stop-loss level between 1% to 3% below the purchase price. For example, if you buy a stock at Rs. 300 per share, a 2% stop loss would be triggered at Rs. 294, helping you limit potential losses while accommodating normal market fluctuations.

To be successful in intraday trading, you must be able to make choices and execute transactions quickly, and you must be ready during market hours if you have positions open. You must also do comprehensive market research and have a solid trading plan and technique to earn from intraday trading.

A Robo order is a multi-leg order used in intraday trading which allows you to place 2 more orders along with the initial order. This order type can be used to book profits at specified target prices as well as to minimise losses at a trigger price.