Intraday Trading Strategies – Beginners Guide To Intraday Trading

– [Instructor] Welcome to the Intraday Trading Strategies for Beginners video series In this series we will be learning about intraday trading strategies and short-term trading in general In this part, I will be covering up the foundations of intraday trading and therefore do watch this video till the end, as concepts discussed in this video will be required in videos ahead In this part we will discuss about intraday and short-term trading as market strategies, along with intraday trading stock selection technique I will then explain you why intraday trading remains one of the most difficult form of trading and how one should approach it I will also be covering up capital requirement along with leverage and its role in failure in intraday trading I will also brief you about the tools required along with some tips about selection of broker In the end, I will discuss how we will proceed in this series So let’s get started – [Announcer] Click on Subscribe button and bell icon to get instantly notified when a new video is uploaded Thank you for subscribing – [Instructor] So let us first begin with some basic concepts and then we will move forward to some advanced one So now understanding what intraday means contributes more to success in this form of trading than knowing a particular method in this trading Now this includes knowing who you are and what suits you best For some of you, intraday will be more suitable, and for some of you, holding positions over two to four days would be more suitable Again, this is something you have to figure out on your own Now too many traders directly want to jump into trading strategies without understanding the Science behind intraday trading, and in this video, this is what I explain So this video, according to me, is perhaps the most important video in this series, and therefore, do watch this till the end Now two most essential qualities of an intraday trader is being flexible and being nimble Now by flexible I mean in being open for intraday and short-term trades as such, and by nimble I mean being open to reverse positions at one go Opinions as such have no value in short-term trading, do remember this Your job is to follow price and to be with it till the trend lasts Now intraday trades usually are held for the day, however flexibility to hold it for two to four days is required if trade does not work immediately in your favor Remember one thing, that in intraday trading you are up against time and volatility Now these are the two element which you should never fight in trading, therefore you have to be highly disciplined when you start with this form of trading So stock selection or instrument selection is the most crucial aspect of intraday trading Quite often this is neglected the most I will try and have one complete part on stock selection because this remains a very important topic So stock selection can be based on news events, earning seasons, merger announcements, or any sector-related reforms as such, however, when it comes to stock selection, there is an element of inconsistency in this as one simply cannot keep hopping from one stock to another Therefore, we will need a detailed approach towards this which we will cover later on Now while stocks can be selected for intraday trading and they remain the most popular instrument, let us not forget that options can also be looked at from intraday and short-term trading point of view, especially weekly options as they tend to move a lot and are really volatile Now when it comes to stocks selection, a lot will depend on visual confirmation as well This is something you will have to practice, and let me assure you, over time you will get better at this So look at the two sub-charts in front of you Which one of the two you think would be more suitable for intraday and short-term trades, and why? Well, in my opinion, choices is very clear, and that is the first sub-chart The reason for saying is very simple In intraday and short-term trading, you have to be in stocks that are moving, and that are not in a well-defined range The more a stock moves, the more you stand to benefit Again, this is something I will be covering in great depth going ahead, but just remember one thing, the key rule here is that the stock or instrument you are selecting has to be on the move else you will simply start picking out stocks which are in a range, and in the end, you won’t be able to make any net gains on it So one of the key things you have to learn in intraday trading is to mark out key levels on chart before the day begins What is prefer is to mark out previous week’s high and low on the chart,

along with previous day’s high and low So in the chart in front of you, I have marked out previous week’s high point and low point to show you how it is done This is something you have to do every single day So high and low of a week has to be marked once in a week, but high and low of previous day changes every day, and hence you have will to update it every single day The main reason to do this is to identify important price action pattern around these particular levels One more important marking which you will have to do is to mark out pivot points on chart Let me show you how this is done Now pivot points have been around since ages and they still do work very well Now there are many variations of pivot points and how they are calculated, but I still prefer to use the standard pivot points Now through pivot point calculation, you do get a pivot level, two support level that is support one and support two, and two resistance levels that is resistance one and resistance two The way these levels are calculated are given in the chart in front of you Take note of the same Let us see how this calculation is done So the first key level is the pivot level For calculating the pivot level you need to add high, low, and close and divide it by three Then you get a pivot level which is 27,160 The value for open, high, low, close for the previous session is given here Now once you have the pivot level, then you simply have to calculate the support one and support two by the formula given here That is 2*( 27,160 ), minus the high price that is 27,314, and then you will get 27,006 Similarly, you do get the support two level and resistance one and resistance two level Again, this is a very standard formula Just copy it and take a note of it I’ll also leave this formula in the comments section below So once these calculations are done on the chart, you have to mark it on the chart as I’ve shown So in the chart in front of you, you can see a pivot level along with support one, S1, and support two, that is S2 Similarly on the resistance side, we have R1 and R2 So every single day you have to mark these on your chart before the session begins So these concepts will come in handy when we start discussing about various intraday trading strategies because we are more interested towards price action around these key levels I hope this particular point is clear So let us now come to the concept of support and resistance Now support and resistance is well known to all Whenever a price repeatedly fails to cross a level, it is termed as resistance, and whenever it repeatedly fails to break a level or zone, it is termed as support So in the chart in front of you, this zone that you see here, this is resistance This is where price has faced repeated selling pressure and it has moved lower each single time And this region that you see here, this is the support where price has repeatedly faced buying and hence has moved up Again, this is very basic stuff The point that I want to show through this chart is that of resistance turning into support, and then support turning into resistance So this is the region where price has faced so much of selling pressure repeatedly Now once price moved above this, look how it now acting as support whenever price is coming back to the zone So this is one of the most important concepts in intraday trading, do keep this in mind This is one more example of this concept So price here found it difficult to get past this resistance zone, and once it did, this resistance zone now acted as a strong support where price again started moving higher So once in a while, I’ll repeat, support turning into resistance and resistance turning into support will be explored later when we get to discussing specific intraday trading strategies This remains one of the most important concepts when it comes to intraday trading and short-term trading as such Let us now move to candlestick charts and patterns For intraday and short-term trading, always be mindful of the wide-range supply and wide-range demand candles These are trend initiation candles and regions which are of high importance when it comes to trading over short-term Now few patterns and structures I will discuss in individual strategy videos, but get yourself accustomed to spotting such wide-range supply and demand candles on the chart So in the chart in front of you, you are seeing wide-range supply candles that are dominating the chart Such candles are pivotal in identify structure of price

and direction of trend So this is another chart highlighting the importance of wide-range candles This chart that you see is a wide-range demand candles on chart Such candles usually occur in clusters, and, hence, one must be watchful and try and spot these as soon as possible Again, implications of these candles with the respect to trend and entry/exit we will see later in the strategies videos But start identifying these candles on the chart from today and start marking them out So these candles visually tell you who remains in control We will be mainly using candle volume charts for our analysis and I will have a separate part for this So let us now move to the most important part of intraday trading and short-term trading in my opinion So as I said in the last slide, in my opinion this is the most important component of short-term and intraday trading This is the concept of participating in a stock when volatility is expanding So this chart that you see in front of you is that of a volatility cycle of a stock There are two distinct markings I have done on the chart On the left side you see these green arrows and on the right side, you see these yellow arrows As an intraday trader, you only need to participate in segments when volatility is rising This is when odds of success actually tip on your side and you must capitalize in these phases Remember one thing, in intraday and short-term trading you want movement in price If there is limited movement, you won’t be able to profit Hence, you should only participate when odds of movement are high, and this usually happens when volatility is expanding on the upside I hope this part is clear as this remains the most underrated concept when it comes to intraday trading Stay tuned, we will be exploring all these concepts in great depth in times to come Let me now explain the number one reason why traders fail at intraday trading, and I will suggest how to deal with this The thing is that intraday trading is so lucrative due to the available of leverage Traders with limited capital think of using leverage to grow their account This approach in my opinion is totally wrong The propaganda that goes around offering five times, 10 times, 20 times, or even 50 times leverage is astonishing I hope you can see how the entire system is luring you into trading over short-term and over intraday in particular Now too many beginners, I feel, fall in this trap as they don’t realize that leverage is a double-edged sword Once you get experience, yes, you should use leverage to grow, however, till you gain experience, leverage is poison for you account and it should be avoided at all costs Now on a account size of just rupees, one lakh easily take up three lakh, five lakh, or even 10 lakh worth of positions in a day This is a very common practice, however, what traders don’t realize is that could take just one session for you to lose your entire account, plus you will owe a lot more to your broker Therefore, don’t use leverage till you gain experience This decision alone will put you light years ahead than those traders who don’t embrace this fact Please be mindful of this In case you don’t have experience or you are new to trading, leverage is poison for your account In this section I will take less than 30 seconds to explain why intraday trading remains the most difficult form of trading So these three markings that you see in front of you, these are two-day price action on a chart The thing with intraday trading is that you’re fighting against time and you’re fighting against volatility Within a short span of time, volatility can completely move against you and, hence, you will need to exit your position This happens so often that it damages one’s psychological setup and one completely abandons this form of short-term trading So the chart in front of you, look at how swiftly price moves up and then it moves down Such price action is easy to see in hindsight, but it is very difficult to deal with when you are seeing this playing out in real time The only way you can beat this is by staying consistent, and by being disciplined, and by not letting such typical days affect you On one such days, in case your leveraged, you would lose your entire trading account Again, I’ll repeat, if you have the misfortune of being highly leveraged on your account and you experience just one session like these one

on the charts, you will completely lose your account So this is one more reason why you should stay away from leverage till you master yourself and your setup So, again, in this section I will take less than 30 seconds to explain why your broker plays a huge role in intraday trading So traders often choose brokers based on how much leverage they offer This is not the right approach, I feel You should always choose your broker based on the stability of his systems It is not unusual to see brokers’ terminals freezing on volatile days and event-heavy days I’m sure this must have Happened to you as well The negative aspect of this is that it could take just one such session where you cannot log into your account to have a significant damage on your account So one thing that I would suggest is that choose brokers based on stable systems Do not chase brokers based on the leverage they offer In the end you’ll simply make them more rich So for intraday strategies that we are going to discuss here, web-based platforms would be fine, however, make sure that the data has to be realtime on those platform I, personally, always prefer desktop software as they let you save your own studies on the charts, and you can add your own custom indicators, and you run realtime scans as well But in the end, it’s totally your choice what you want to select So this is, again, one segment that most beginners get it wrong I will explain this segment assuming one has one crore total capital at hand The way I would allocate this capital into various segments of market would be as follows For investment, I would allocate 70% of my capital, that would be roughly 70 lakh rupees For positional trading, this would actually constitute about 25% of my capital, that is 25 lakh rupees And the remaining 5% that you see, that is five lakhs, that would be kept for intraday trading Now most beginners often allocate too much of capital in intraday trading and short-term trading This remains one of the main reasons why they blow up their account too fast Remember one thing, a lot of people benefit if you trade on short-term basis, right from your brokers to those who want to sell their stock recommendations to you Don’t let them dictate to you what needs to be done in your own account Be practical and don’t let your emotions take over you Do not forget one thing, that wealth is made over long term It is only that income is made over short term Don’t mix the two, have your allocation right, and be smart about how you allocate your money So this one more aspect that traders need to pay attention to Every now and then you will come across strategies, or trading systems, or traders being advertised as best or ultimate Now, the thing is, you have to remember one thing that when you hear such things, always be careful There is no such thing as best or ultimate In my opinion, trading is all about hard work You need to take one method, research it, take notes, practice it, and then make it your own There is no shortcut to success in this field Now many beginners commit a mistake of moving in a loop where they keep switching their strategies based on what they hear Avoid this at all costs If you follow this advice, again, you will be light years ahead of those who will keep believing in the myth of some best strategy or some best system out there So in this section, I will cover how long it takes to be successful in intraday trading There are key four steps you need to follow First step is understanding what you want in this You need to choose which instrument you want to trade, who is going to be your broker, understanding what is your patience level, and setting realistic goals and expectations Second step is to finalize your intraday setup Whether you will strictly trade on intraday basis or you will keep positions for two to four days, this is what you will discover in this phase You will also identify whether you like to trade with the trend or you are mean reversion trader So third step is to practice and to adapt the method you have selected In this you will religiously practice the setup and takes notes, and then fine-tune the method based on your own psychological profile Fourth and final step is the most important step in this process, and it of being disciplined and focused on improving with each passing day So realistically speaking, I think it takes about 18 months of hard work to get a hang of short-term and intraday trading It’s a rigorous process one has to undertake, and only then one can start making money So let me now explain how we will be proceeding in this series Instead of focusing on too many strategies, I will introduce you to two very common intraday

and short-term trading strategies I will show how to execute this, and I will show you how to identify high-probability conditions to identify these setups I will also be showing you stock selection strategies and some price action concepts with respect to candle volume charts I will then be showing you how I execute these as I takes trades in my own account as case studies DO not forget that intraday and short-term trading setups require an approach of a hawk This means it requires patience, a lot of patience, and then, again, more patience You need to strike only when it is required Most importantly, being an intraday trader does not mean that you have to trade every day So do share this video and hit on the Like button if you have enjoyed this video So this is the foundation video of intraday trading strategies, and going ahead, we will be moving very fast into some advanced concepts So thanks a lot for watching this video, guys Be safe and take care