IGI Logo

Intraday Trading Involve High Stakes

Intraday trading requires the participants to be on their toes for most of the trading day as it requires traders to carry out large-scale buy and sell orders within a given trading day. Since day traders don’t get to enjoy overnight gaps that swing traders do, their gains, as well as their losses, are more linear in comparison to those of swing traders. Therefore, day traders stand to benefit from knowing exit strategies. Continue reading to understand what some of these are.

Exit Strategies for the Vigilant Trader

-  Understand the Trading Day –  Intraday traders must not lose focus on the overarching market context when assessing 1-minute charts. Instead, they must consider where the stock in question falls on a daily time frame. Questions to ask here include whether it lies within or beyond the previous day’s range and whether the volatility has changed. Rather than blindly applying one strategy alone, a good trader will adapt and implement a strategy that matches what the market brings on that day

- Create Profit Targets – Common issues that traders experience relate to overextending themselves or exiting the market too soon. If a trader takes a portion of his position off once he reaches an intermediate profit, he can resolve some of the guilt he might otherwise experience for letting a gain turn into a loss or for drawing in profits too soon.

- Big Win? Use a Tight Trailing Top – When the market seems to be working a bit too well in your favour it may in fact be reaching extreme levels. As a result, it could be likely for it to experience a fast reversal owing to the greater level of volatility. This could put you in a difficult spot as you could end up converting a big gain into a small one. A good strategy to adopt here is a tight trailing stop. Here, a short-term moving average or a short-term support/ resistance level is used.

- Set up Stop Losses – If a market has a large number of day traders, stops end up clustering around predictable levels such as a given support/ resistance level or else the low of the day. To avoid setting your stop loss at the same level as other day traders, simply position it to lie a bit further ahead of behind the obvious level. This can help you reduce the slippage that might otherwise transpire when a large number of stop market orders are triggered and result in a large range bar.

Learn More at Angel One

While the above mentioned strategies are viable, it makes sense to not limit yourself and learn multiple exit strategies along with other suggestions relating to day trading. A great place to gain these insights is the Angel One website which is home to two knowledge portals i.e., Knowledge Centre and Smart Money¹ .  Here, information is broken down into modules that are easy to understand and rich in examples. Should you wish to, you can always learn more about the markets on themarkets on the Angel One YouTube channel. There are several series targeting different topics that are available here and are geared towards educating investors and traders.

Like all forms of trading, intraday trading too requires you to be diligent, aware and make informed decisions. Therefore, knowing all aspects of this trading style is a must if you wish to generate profits. Learn more about intraday trading and begin your trading journey today on the Angel One website – a one-stop shop for all your financial needs.

Disclaimer

¹ Smart Money is not an exchange approved product and any dispute related to this will not be dealt on exchange platform

² This blog is exclusively for educational purpose

³ Investments in 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/3dMS6Kf

Above views are of the author and not of the website kindly read disclaimer