Stocks rise and fall. That is the natural order of intraday trading. Every day traders dream of achieving a high increase in their respective stocks. And to those that do, well pat yourself in the back for a job well done. However, how can you know if you have reached the highest possible potential of the day? What if in the next hour the stock rises up to double of what it was? Or what if you waited too long and it ends up crashing down to negatives?
You don’t need a reminder about the risks you can receive while day trading. What you do need are some clever strategies to utilize your trades. And to guarantee yourself that you have milked it to its fullest. That is why you should check this list out for entry and exit strategies for intraday trading.
Intraday Trading Strategy 1: Follow The Current Trade Trend
The market is similar to surfing. It flows through like waves. And as a trader, it is your responsibility to ride those waves. Take short-term positions during downtrends, while taking long-term during uptrends. One important thing you should note down is that, due to the unstable nature of trends, a single trade could create an impact on the “flow of the waves”.
Take some time into reading the market history of the stock. Through which you can isolate the trend. Thus providing you with a better understanding of the varying degrees of trends on the said stock.
Intraday Trading Strategy 2: Trade Strong On Uptrend, Weak On Downtrend
As previously stated, stocks come and go like waves. They can go on an uptrend but then turn into a downtrend after. Managing these “waves” is essential for a successful intraday trading. However, that is not the only way to manage your trade stocks.
Day traders should look to buy stocks that are increasing in an aggressive manner than the futures. Because it creates an opportunity for a strong stock to move up to at least 2% when the index increases. And they lead the market higher due to less risk of pulling back. Thus, providing more potential.
Meanwhile, day traders should focus on short selling stocks that are dropping faster than the market. With the futures moving higher, there would be limited to no movement upwards. Thus providing great potential when the market is failing.
Intraday Trading Strategy 3: Patience Is A Virtue
With intraday trading being a business of speed and knowledge, it is important to have a general guideline. And trendlines are a visual guide that can help you view the price waves from beginning to end.
The more patient you are, the more long-term trades will provide a low-risk entry. If you are patient enough, you might even manage to purchase something close to the stop-loss level. However, you should still remember that trends do not always continue and that losses can still arise from being too patient.
Intraday Strategy 4: Take Regular Profits
Sometimes you just have to learn when to sell everything and quit. As a day trader, you have a limited amount of time to gain profit. And thus you should be spending as little time as possible in trades. If it is not going to be a large profit difference then you can go ahead and sell. Even if it means that you can only break even. Sometimes it is better to quit and move on to another stock.