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Stock market and volatility share an eternal bond. The price chart never goes in one line, rather, it constantly shifts between - uptrend, downtrend, and sideways trend. As a beginner, it is important to learn about these trends. At the same time, you must also note that different strategies are required to trade in different types of trends.

Having a game plan that gives you bigger gains and comparatively smaller losses is vital in becoming a profitable trader. While more of these intricacies about the stock market can be learnt from Angel One’s website, you can find the top three strategies in this article.

Let’s start with the basics before wrapping our heads around the strategies.

Understanding Intraday Trading

Intraday trading involves buying and selling shares, options, futures, or other financial instruments on the same day. As the usual trading session starts at 9:15 AM and ends at 3:30 PM, the intraday traders enter and exit the trade within this brief window. An intraday trade could last anywhere from a few minutes to a few hours but it is never carried to the next day.

Since the trade is entered into for such a short duration, it requires quick and precise action. This is where the role of intraday trading strategies comes into the picture.

Intraday Trading Strategies for Beginners

Here are three intraday strategies that can be easily used for intraday trading. Let’s explore them.

* Opening Range Breakout Strategy

According to this strategy, you mark the high and low prices of the previous day. As the price breaks out of this range on either side, you enter a trade in that direction. A 15-minute time frame is most effective while trading with this strategy.

Let’s assume that the previous day's high and low of a stock is ?115 and ?109 respectively. If a 15-minute candle closes above ?115, you buy above the high of the breakout candle. Your stop-loss will be below the low of the same candle. A risk-reward ratio of 1:2 can be expected out of this strategy.

* Trend Reversal Strategy

Trend reversal marks the end of one trend and the beginning of the other. It means that the price changes its direction from going down to going up or vice versa. There are various indicators like MACD, Moving Averages, Bollinger Bands, RSI, etc. that help traders in spotting reversals.

Knowledge about support, resistance, and Fibonacci retracement levels can be of great help in this type of trading. However, you must realise that trading reversals could be tricky for many traders. But honing this skill in the initial stage can assist you to flourish in your trading career.

* Gap Trading Strategy

A gap is formed with the price opening above or below the previous day’s closing price. There are four types of gaps: exhaustion gap, common gap, runaway gap, and breakaway gap.

You must carefully identify the type before entering into a trade. Each type of gap requires a slightly different formula to trade effectively. Although trading with this strategy can give you high-probability trades, it is always in the best interest to put a strict stop-loss in place before playing with the gaps.

Conclusion

There are many intraday trading strategies available online, apart from the ones mentioned above. You should wisely analyse and choose the strategy that compliments your trading styles and psychology. Irrespective of the strategy you follow, always maintain a stop-loss to avoid big losses.

Along with the trading strategy, there are various other factors to keep in mind like the right stock picking, leveraging, risk-reward ratio, money management, etc. To learn more about these topics, you can refer to Angel One’s Knowledge Centre. It is a free platform that imparts in-depth knowledge to help you understand intraday trading in shares and options. Learn before you earn.

Happy Trading!

Disclaimer:

1. This blog is exclusively for educational purposes

2. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Brokerage will not exceed the SEBI prescribed limit. https://bit.ly/2VBt5c5

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