What do you need to know about intraday trading? – Definition of Bullish flag and trading triangle

Intraday trading is considered riskier than regular market investments, so the traders, especially the beginners can face losses if they aren’t prepared. That is why the beginners must know about all the basics and advised them to invest a little

the amount, which they can afford to lose.

If you are interested in trading and thinking about ‘how to trade’, this article could be very useful, so read it till the end.

Some basic rules for intraday trading

Choose 2 or 3 liquid share

Intraday involves matching up the open positions before the trading session gets end. That is why it would be a clever move to choose 2 or 3 highly liquid large-cap shares. If you invest in a small or medium-size cap, you will have to hold on to them because the trading volume will be lower.

Fix entry and target price

Before placing the order, one must fix their entry and target price, because it is quite common to change the decision after purchasing. This way, you will be ready to sell your shares even if a slight increase is noticed. While this could provide you smaller benefits frequently, but also taking you away from achieving higher fans.

Stop-loss for lower points

Stop-loss is an alarming sign to sell the shares if the price goes down than your pre-specified quota. This could prove to be a beneficial stand to avoid losses if the market price slides down. This is the best option for investors who are interested in short-selling. So, the stop-loss strategy can minimize the losses if the price goes upwards unexpectedly. This will also help the investors to keep their emotions away from making crucial decisions.

Book the profits after reaching the target

This is a fact that most of the day traders suffer from the fear of losing or cultivates greed to get more. It is very important for both small and large investors to cut their losses and book their profits once they reach the targeted price.

In case if the investor assumes that the price may go up in the near future, they should adjust the stop-loss limit first.

Trader, not investor

No matter what you call it, intraday trading or investing, an individual will have to purchase shares. But there are a few minor differences in both strategies. The first kind adopts the fundamentals, while they go for technical details.

It is quite common among the day traders to take the delivery of shares if the target price is not met with. After that, they will have to wait for the price to recover and earn back the money. This strategy is not recommended at all because the stock may not be worthy of investing as it was purchased for a smaller period.

Conduct some research about your wishes

The investors are always advised to add at least 8-10 shares in their wish list and conduct deep research about it. If you keep track of certain corporate events, like mergers, bonus dates, dividend payments with their technical knowledge, it will only provide you with numerous benefits and options.

Don’t move against the market

Even experienced professionals with enhanced tools fail to make the right predictions sometimes.

There are certain factors that need to tracked and two most important among them are,

• Bullish flag
• Trading triangle

Bullish flag

A bull flag is a rectangular pattern that alerts the traders about highs and lows.

Trading triangle

Triangle pattern is a horizontal pattern that indicates the market is trading sideways.