INTRADAY TRADING ACCOUNT

There are two primary ways stocks create wealth. One is through long-term appreciation. This involves buying a stock and holding it for several years, profiting from the growth of the company. On the other hand, day trading (through an intraday account) is where shares are bought and sold the same day. The profit would be the difference between the buying and selling price.

How intraday trading works

To do this kind of trading, you need to have an intraday trading account. Only members (brokers) are allowed to trade on the stock exchange so you need to open a day trading account with a brokerage firm like PR wealth Growers/Angel Broking before you can jump into the fray.

Having an intraday trading account is the first step. But you must understand the basics of intraday trading before putting any real money in it. You must be able to understand market trends if you are to make any money from them.

Once you’ve opened your intraday account, you can go ahead and trade. As we have mentioned above, day trading involves buying and selling shares on the same day. There is no exchange of shares since your buy order is squared off against your sell order on the same day. Day traders rely on price volatility to make gains. Generally, they make a large number of trades, making small gains from each.

One important concept you should understand while opening a day trading account is the concept of margin. This allows you to trade in large volumes. You have to pay a margin to the broker before you start trading. This is a percentage of the transactions you carry out. If the margin is 10 percent, and you want to buy or sell Rs 1 crore worth of shares, you will have to pay Rs 1 lakh to the broker. This increased exposure will raise your chances of making a profit. However, conversely, it may also increase your chances of losses. It’s better to proceed with caution while using this leverage.

How to identify trends

As we have mentioned above, the profits you can make from your day trading account depends on how well you can identify market trends. One of the essential tools in the day trader’s kit is technical analysis, which uses past price trends to give you an idea of how prices will move in the future.

Day traders can rely on various charts and trend lines to discover how prices are moving. You can make use of information from line charts, bar charts and candlestick charts to help you find out price trends.

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A critical tool of technical analysis that day traders rely on is support and resistance levels. These can be identified by using trend lines to draw points at different price points. The upper price band is the resistance, while the lower band is the support. The strategy varies on how the current price is relative to these levels. If the price is moving towards the resistance level, it may not be an excellent time to buy long since prices could hit the resistance and fall back. When prices reach the support level, selling short won’t be a good idea, because prices could bounce back from that level.

How to succeed in day trading

There’s no surefire way of predicting success in day trading, but here are some pointers that should help you after you get going with your intraday trading account.

  • Gain knowledge: You will need to keep abreast of the latest national and international events since these will affect stock prices. If the economic outlook looks gloomy, stock prices could take a tumble, as could election results.
  • Don’t panic: Day trading needs a cool head on your shoulders. If you panic, and rush to close your transactions before reaching your target, you won’t make money. On the other hand, you should also know when to cut your losses and get out when things don’t go your way. There’s nothing worse than pouring good money after bad.
  • Keep expectations modest: Don’t go for windfall profits. It’s always a better idea to take a decent amount of profit from a large number of transactions.
  • Use stop loss: Stop loss is an invaluable tool that helps you keep your losses within limits.

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Choose the right broker

You should choose the right broker who charges you low brokerage because you will be making a large number of transactions. Some amount of support, like technical analysis and research reports, could also be helpful.

Why PR Wealth Growers is the right choice

Here are some of the reasons why PR Wealth Growers is the right choice for your intraday account:

  • Long track record: It’s been in the industry since 2013.
  • Guidance: You get the benefit of technical and fundamental research