Intraday Trading is just the trading style when you unlock trading situation following the markets open in the morning of any trading day and shut them before the end of the day. You merely close positions at the closing stages of your trading day.
As a result of explanation, the price action in an intraday trade will be a part of the daily average traded range. Therefore, if the daily range is hundred points, your trades may target twenty-thirty-fifty points for instance. Here in a positional trade, the assortment is comparative to the period of interest and will be multiples of these statistics.
In Intraday trading, most brokers/markets permit trading with smaller exposure and higher leverage. Consequently trading Nifty fut in and for the night trade, you require a margin of twenty five thousand rupees, for intraday trading, the margin is around Eighteen Thousand rupees or about 30 percent lower. Depending on your broker’s procedure, you may be required to close all your positions about 15 minutes to 30 minutes before the market close or they are auto closed. This may or may not cause a problem, pedestal on your trading method.
The additional important point to be renowned though is that the working capital required for intraday trades is normally much lower than for positional trades.
The second feature is to consider the comparative volatility of price moves. Just as you move from 1 minute to five minute to fifteen minute or hourly charts, the intraday price movement gets "moist", the time frame that you desire to trade in becomes important. Quite a few experts suggest combining a look forward and look back approach. Which means if you trade five minute charts, you may get the first signs of a new trade on a one minute chart and use that for entry of the trade? In the same way, the bigger picture in the fifteen minute as well as hourly charts tells you the general market sentiment bullish and bearish and the probability of the trade to continue in your chosen trade route. A protracted trade in a bearish market would be the province of a scalp trader or an aggressive trader expecting a U-turn, but a high risk trade in any case. Similarly a elongated trade in a bullish sentiment in higher time casing is a safer trade.
Maybe, the mainly significant issue that will determine your trading choice is the amount of time you have to trade in a day trading. Is if you are a positional trader and encompass a trading method that works in intraday time frames, you could believe intraday trading after appraising the risks.
Risks in Intraday Trading: In intraday trades for Nifty fut, for a target of twenty points, if we setup stop losses of twenty points (say) and expect to trade 3-4 times in a day. Your maximum risk is twenty x four = Eighty points or Eighty x Fifty units per Nifty lot = Rs 4000 per lot. Is that affordable for you. The same risk for one lot mini nifty with Twenty units = Sixty x twenty= Rs 1200 per lot. Assuming that you will do Fifteen trades in a week with a sixty percent success rate or six losing trades, or Eighty points or Rs Eighty x Fifty = Rs 4000 for Nifty futures and Rs 1600 for mini Nifty futures. Execute these numbers fall in the range of your trading risk tolerance? Reproduce these numbers by number of lots (deal) that you intend to trade for each trade and you acquire your entire risk disclosure. For two lots its Rs 8000 or Rs 3200 for Nifty/Mini Nifty fut respectively.
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