How to identify stocks for intraday trading?

share market intraday trading course in kolkata

Intraday trading is a quite known form of trading in stocks where the investors attempt to make a gain by trading the stocks within the same day. As with any type of trading, there is a certain amount of risk involved, and the key of successful intraday trading is to know how to identify stocks that have the potential to move in the right direction. It is suggested to opt for a intraday trading course in Kolkata for a better understanding before involve into intraday trading.

Before you begin trading with intraday stocks, you must have knowledge about the market and the stocks you are trading in. You need to be familiar with stocks and market trends to recognize when the stock is about to make a move.

Intraday Trading

Mentioned below are multiple methods through which you can identify the potential stocks for intraday stock trading.

  1. Technical Analysis
    Making use of technical analysis is counted among the most popular methods of recognizing intraday trading of stocks. It involves studying the price and volume charts of stock to identify trends and patterns. By understanding the charts, you can recognize stocks that possess the potential to shift in a certain direction. For an instance, if the price of a stock is trending upward, it can be a good candidate for intraday trading buying opportunity.

  2. News and Events
    Another way to identify intraday trading stocks is to keep an eye on events and news that might make an effect on the stock. If a company announces a new product or service, for example,  Tata Motors supply 25,000 electric vehicles to Uber this could cause its stock price to move in a certain direction.
    Similarly, if a company releases a poor earnings report, this could cause its stock price to fall. By keeping an eye on news and events, you can identify stocks that might be good candidates for intraday trading.

  3. Sentiment Analysis
    Sentiment analysis is another way to identify intraday trading stocks. This method involves looking at the sentiment of investors and traders toward a particular stock. If it appears that the sentiment towards a stock is generally positive, this could signal that the stock is likely to move in a certain direction.
sentiment analysis chart

The six benefits of intraday trading will help you to make use of your intraday trading strategy better

  • Reduced Risk: Intraday trading can be used to reduce risk. By taking advantage of short-term market movements, traders can limit their exposure to large market swings.

  • Fast Execution: With intraday trading, the investors may benefit themselves from short-term market movements rapidly and smoothly. By utilising margin trading, leverage, and short selling, traders can quickly make trades and capitalise on their potential gains.

  • Margin Trading: Margin trading is when investors borrow money from a broker to purchase more stocks or other securities than they can afford with their own money. Intraday traders often use margin trading to maximise their returns.

  • Leverage: Leverage is when investors use borrowed money to purchase more stocks or other securities than they can afford with their own money. Intraday traders frequently use leverage to maximise their returns.

  • Short Selling: Short selling is referred to a situation when an investor borrows security or stocks from some other broker and sells them in the hope to purchase them back at a cheaper rate and gain profit out of it. Intraday traders typically use short selling to capitalise on market fluctuations. For this short selling, it is suggested to take help from a professional and learn intraday trading in Kolkata.

  • Low Transaction Costs: Intraday trading usually involves lower transaction costs than other forms of trading. By utilising margin trading, leverage, and short selling, traders can minimise their transaction costs.

  • High Volatility: Intraday trading involves taking advantage of short-term market movements, so it is important to have access to real-time information and data. Intraday traders must be able to react quickly to market changes in order to maximise their returns.

    It is always a better decision to look before you leap and in the same lieu it is advantageous to learn stock market trading to have a better experience and gain.
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