hi i m new to stock market and want to know that is there any stratgy or any hints through which i can learn that which stock is good for intra day trading
Futures and options stocks with good open interest and high volatility EQ stocks are always good for intraday trading. the stock should also have high liquidity to ensure tight bid ask spreads.
Already answered a smiliar question, let me put the same answer here as well.
There are many ways to short list stocks for intraday, one such method is called as NR7 method.
Trading using NR7 Method:
Market goes through regular contraction (i.e. daily trading range getting shorter and shorter) and expansion (i.e. daily trading range getting bigger) cycle. Expanding range is followed by Contraction and vice-versa. So if we can indetify the narrow range days, then it give us a step ahead of everybody to benefit from coming expansion.
NR7 is term given to a day that has the daily range smallest of last 7 days including that day.
How to Find NR7 day..
1) Get the High and Low data of last few period
2) Calculate the range of each day i.e. high - low) for each day
3) Compare the range of a today and previous 6 days range (to get NR7. To get NR4 get last 3 days range)
4) If today's range is smallest of all 7 days, then today is NR7 day..else not.
It is that simple.
This is one of my favorite setup. It gives u a chance to be ahead of trade follower / indicator followers who will jump in the trend after you.
One of the easiest way to trade this setup will be to
go long above the Day's high of NR7 day with stop at the Day's Low of NR7 day.
Go short below the Day's Low of NR7 day with stop at the Day's High of NR7 day.
Observing this pattern gives day trader /swing trader a distinct edge to trade next 1 or 2 days. In many cases, NR7 break-out is found near the start of a new wave. For day trader, this setup indicates that they can anticipate wide range days, so they should be prepared to chase the trend and use trailing stops so that they can get maximum from
the coming trend.
On 02/09/2014, Auropharma had the lowest range day in last 7 days. i.e NR7 day. on 2nd, the high price was 818.3 and low price was 805.25
On next day, if the stock hits the high of 818.3, we will go long with stop loss of that day's low which is 805.25.
You can see that stock was moved out of contraction phase and started trending from 800 to 900 within few days.
On 24/6/14, Tech Mahindra had the NR7 day with high of 2007 and low of 1987.15, next day if the stock hits 2007 we go long with 1987.5 as stop loss. The stock zoomed in next 3 days to Rs. 2135
This method works well with many stocks.
Check out below article which explains this in detail:
How To Become A Day Trader :
During the heyday of the tech bubble in the late 1990s, day traders made easy money buying and selling Internet stocks. It didn't take much skill to succeed in those days. In just a 17-month period, from October 1998 to March 2000, the Nasdaq Composite Index skyrocketed from roughly 1,344 to an all-time high of around 5,132. All you had to do was ride that tidal wave to rake in the profits. Many of those traders made just as much shorting the index on its way down to a low of about 1,108 in October 2002, losing 78% of its value in 31 months.
Once the bubble had fully deflated, the easy money dried up. Many of those who had profited through good luck and timing left trading and looked for other work. They discovered that day trading, like any other profession, requires education and skills to consistently make a living.
A pure day trader buys and sells stocks or other investments and ends the trading day in cash with no open positions. If a position is held overnight or for several days, it's called a swing trade. Most day traders use both approaches, depending on their trading style and the nature of their investments.
Day trading requires a professional software platform and a high-speed Internet connection. While it's possible to design and build your own trading platform, most traders use a prepackaged setup provided by their brokerage or a specialized software company. It's best to have a powerful desktop with at least two monitors, and preferably four to six. You need multiple screens to display the charts and technical indicators that will provide your buy and sell signals.
When you use a brokerage platform, ensure that real-time news and data feeds are included in the package. You'll need that data to construct charts that expose trends and portray the time frames and trading strategies you want.
Familiarity with stocks and market fundamentals isn't enough to succeed as a trader. You should understand technical analysis and all of the tools used to dissect chart patterns, trading volume and price movements. Some of the more common indicators are resistance and support levels, moving average convergence/divergence (MACD), volatility, price oscillators and Bollinger Bands.
Learning and understanding how these indicators work only scratches the surface of what you'll need to know to develop your personal trading style. Hundreds of books have been written about day trading, and you can also take classes online or in person.
Trading requires sufficient capital to take advantage of leveraging fairly large positions. Most traders make their money on relatively small price movements in liquid stocks or indexes with mid to high volatility. You need price movement to make money, either long or short. Higher volatility implies higher risk, with the potential for greater rewards and losses.
Unless you can buy several hundred or more shares of a stock, you won't make enough money on trades to cover the commissions. The lower the price of the stock, the more shares you'll need to gain sufficient leverage and total price movement.
The key to successful trading is developing techniques to determine entry and exit points. Most traders develop a style that they stick with, once they are comfortable with it. Some only trade one or two stocks every day, while others trade a small basket of favorites. The advantage of trading only a few stocks is that you learn how they act under different conditions and how movement is affected by the key market makers.
Develop a process and try it out with fictional trades. Refine the process and find what works for you. Only then should you put real money on the line and start actively trading the markets. Experienced traders define what constitutes a trading setup and the pattern and indicator combination they want to see before pulling the trigger. They rarely deviate from those setups in order to maintain focus and keep their emotions at bay.
Once you enter a position, stops should be placed to get you out of that position when a specified loss threshold is reached. If a trade is going the wrong way, hope and prayer will not help turn it around. Exiting the trade frees up your capital to redeploy to another more promising trade. You want to exit losers as soon as possible and ride the winners as long as they're profitable.
The Bottom Line
The success rate for day traders is estimated to be around only 10%, so if 90% are losing money, how could anyone expect to make a living this way? The answer lies in professional training, diligent research, refined skills, great discipline and the ability to admit mistakes and cut your losses. You have to be prepared to make split-second, unemotional decisions based on information that is sometimes incomplete, contradictory and changing by the second. The statistics prove it's clearly much easier said than done.
Day trading is not for the faint of heart. A winning strategy may involve executing many trades in one day, while avoiding the trap of over-trading and running up huge commissions. Day trading can be fun, as well as profitable, if you learn the ropes and set realistic goals.
How I select stock for intraday
Dear Mr Rajdeep
Hope u are doing well in trading with your vast knowledge
U have delivered wonderful article regarding intraday trading , little difficult to understand by beginners
But experience traders can definitely catch up
With your value added inputs for intraday trading
But trading discipline with target and stop loss is must if not intrading trading is risky affair ,
I would like to have more input on intraday trading
Which are the best indicators to be followed by you
In intraday trading
U were mentioning about training hope this will not help much as per my knowledge as the intra trading
Mainly depends on market sentiments
Hope NSE web site will give ample inputs and knowledge regarding intraday script selection
Top gainers and top loosers will give little bench mark to select the scripts days high equal to low
And sectorial index will help regarding movement of particular stocks
As u have said indicators are to be studie properly before one wants to start of intraday trading
There are very good y tube Vedios for all required inputs ,educated professional can catch up easily by reviewing these Vedios and gain sufficient knowledge
Which I have done by review of many Vedios
Volume indicators and bulk purchases will be indicated in NSE website which will help to know the stock movement better
Thank you for valued inputs would like to have some more tips for intraday trading from your end
Kindly mail me details to my personal id
U had mentioned about training portal pls share us the details and fee proposal to contact them in person
With Best Regards
Suresh B Ramaiah
There are couple of methods I follow to select intraday trading stocks for the next day at the end of the market.
Intraday trading is all about quick momentum and small time duration. We cannot always trade on fixed set of stocks every day, we need to find out list of stocks that have shown significant strength or weakness. So to start with, I will first list down what are the top 5 gainers and top 5 losers for the day in NSE Fno segment.
This link will give you this data by EOD.
sharing some data analysis done for last 10 years data sets here, listed below is the return distribution, whenever a stock closed positive, how it reacted next day.
The below table, shows % returns for the day on left side and right side shows no of such occurrences. The same is shown in graphical representation below. It clearly shows that, next day returns are largely negative .
So a top gainer for today could be a stock to watch out for short the next day and vice versa for top loser.
Next is Volume Gainers :
I need to find the list of stocks that has show significant volume strength, we cannot simply pick top volume gainers for the day and trade on it next day. Stocks like RCOM, JPASSOCIATES might have more no of volumes and more % increase frequently. We need to to find whats their average volume and whats today’s volume, and then compare how much % it has increased when compared to its average volume.
I download EOD data for all NSE Cash and FnO stocks and calculate the above ratio, which will give me volume gainers list.
Next is Volatility Gainers :
Many traders tend to ignore the Volatility Gainers list, many institutional traders take positions in stock options and sometimes they unwind their positions or add more, and these indirectly results in increase in Volatility. For example, when a stock tanks in a day and also if volatility is increased exceptionally for this stock, it could mean that next day also, it can continue it momentum. So a stock that comes in Top 5 loser list and also in Volatility gainer list, is a very good candidate to trade next day.
So I download the daily volatility data from NSE and check what is the % change in volatility of each stock and sort them descending order and pick top 5 from this list.
As all these are time consuming process, I have created my own automated bot, that scan and do the analysis for me and message me this list automatically every day at 8 PM, so that next day I can be prepared to trade on it.
As these information are really help full, I have also started sharing this data for with other trades for free through Telegram, Twitter and FB.
But on this website …how do you choose stock for intraday?
Is there any weblink where we can find volatility gainers/loosers ?
should we look at most active scrips on nse webpage which is https://www1.nseindia.com/live_market/dynaContent/live_analysis/most_active_securities.htm
@maddy_Des @Streak @siva @ShubhS9