What are some good intraday trading strategies?

Intraday trading is different from buying and holding stocks. It’s about trading stocks in a very short time frame. Stocks go up or down in a day. How does a trader profit from that? By buying and selling stocks intraday. Intraday trading is about making small profits from stock price fluctuations within a short time frame. Like any other type of trading, intraday trading requires a strategy and a plan. The strategies for intraday trading vary from trader to trader. Some buy stocks that are about to go up, some trade stocks based on technical analysis, and some trade stocks based on news. Read on for some intraday trading strategies that can help you profit

Intraday trading strategies

1. Knowledge Is Power
   In addition to knowledge of basic trading procedures, day traders need to keep up on the latest stock market news and events that affect stocks — the Fed’s interest rate plans, the economic outlook, etc.
   So do your homework. Make a wish list of stocks you’d like to trade and keep yourself informed about the selected companies and general markets. Scan business news and visit reliable financial websites.
2. Start Small
   As a beginner, focus on a maximum of one to two stocks during a session. Tracking and finding opportunities is easier with just a few stocks. Recently, it has become increasingly common to be able to trade fractional shares, so you can specify specific, smaller dollar amounts you wish to invest.
   That means if Amazon shares are trading at $3,400, many brokers will now let you purchase a fractional share for an amount that can be as low as $25, or less than 1% of a full Amazon share
3. Avoid Penny Stocks
   You’re probably looking for deals and low prices but stay away from penny stocks. These stocks are often illiquid, and chances of hitting a jackpot are often bleak.
   Many stocks trading under $5 a share become delisted from major stock exchanges and are only tradable over-the-counter (OTC). Unless you see a real opportunity and have done your research, stay clear of these.
4. Momentum trading strategy:
   Intraday trading strategies are all about finding moving stocks that show fluctuations on an everyday basis. You can find around 25–35% of stocks that show fluctuations. This fluctuation is referred to as momentum. Stock scanners are used to find such stocks. These stocks tend to move above the Moving Average without any resistance in high volume. Momentum in the stocks can be created by a catalyst like earnings but it can also be generated without any fundamental back up. This is called a technical breakout. In momentum trading strategy the traders try to pick up those stocks that move in a single direction in high volume. The profit to loss ratio in momentum trading strategy is 2:1. A trader can hold the stocks for minutes days or hours depending upon the rate of movement of the stocks.
   Momentum strategy works best during early trading hours or when the volume is high. If you are alert during opening trading hours, you can make a good amount of wealth through this strategy.
5. Reversal trading Strategy
   In reversal intraday strategy, traders look for those stocks that are at extremely high and lows. They have a good chance of path reversal. As soon as the movement of the security reverses, a stop is marked and the traders wait for the securities to hit maximum fluctuation. A trade is executed when the reversal value hits the trader’s estimated limit.

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