Learn successful intraday trading strategies, find tips and tricks for intraday trading, and discover the techniques used by our expert traders. Throughout this guide, you’ll learn how to start intraday trading and to stay consistent with our intraday stock strategy.
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Intraday trading requires a specific set of skills. You need to be able to work under pressure, your trading game needs to be on point, and you also need to accept that you’ll take losses along the way. Intraday trading requires discipline and a willingness to look at the bigger picture--not just obsess over a single position.
Throughout this intraday trading guide, you'll basic intraday trading strategies plus our top 5 tips and tricks for intraday trading. Moving forward, our intraday trading experts will outline the things you need to pay attention to that losers ignore.
Getting to Know the Basic Intraday Strategies
Some of the most popular intraday trading strategies include:
- Momentum strategies – Seek to capitalize on the quick bursts in price.
- Breakout strategies – Seek to capitalize on support/resistance breakouts, high/low breakouts.
- Scalping strategies – A trading style that specializes in small quick profits.
- Opening range breakout (ORB) – Involves taking advantage of the directional bias established at the open.
- High-frequency trading – Algorithmic trading, including arbitrage or trading the bid-ask spread.
- Intraday trend trading – Seek to capitalize on following the intraday trend.
- Volume-based strategies – Uses volume indicators to determine the strength and weaknesses of the stock price.
- Chart pattern strategies – Seek to capitalize on short-term stock price formations on the technical chart.
These are some of the most successful intraday trading strategies used by beginners and professional traders alike. Traders of all backgrounds need to keep in mind that even the best intraday stock trading techniques can occasionally fail. Your goal is to have your wins be significantly greater than your losses.
Having an effectively tested intraday stock strategy is important, as is having the discipline to execute your strategy. Below, we will help you learn everything you need to know about intraday trading strategies and how to ensure that you'll be able to successfully balance protection from risk with the pursuit of strong returns.
How to do Intraday Trading: The Tips and Tricks You Need to Know
The complete list of intraday trading tips can help traders understand what types of strategies can be successful. If your goal is intraday trading for a living, you must know the following intraday tips.
Six tips for intraday trading we wish we knew before starting stock trading:
- Choose a stockbroker with competitive fees, clearing fees, data fees, account fees, platform fees, and commissions in the long run, can eat from your intraday trading profit. Lesson: limit the costs of doing business in the stock market. In some cases, you may want to use a fee-free platform, such as Robinhood. If this sounds appealing to you, consider learning How Does Robinhood Work?
- Don’t focus on the money factor, but instead manage the risk and use stop losses.
- Develop a good entry method, timing is key in a fast-paced environment like day trading.
- Define fixed business trading hours – this is your window of trading opportunities (E.g. trading the opening bell or trading the close). Defining a structure to your trading hours will allow you to not stay glued to the screen all day long. Check out this single stock trading strategy that takes advantage of the opening bell.
- Cut losses short – If a trade goes against you, don’t wish and pray, be proactive, and cut losses quickly.
- You can’t have home runs with intraday trading strategies. The key to making a lot of money in the stock market is that small and quick gains can add up.
If you didn’t have a stock trading mentor, these tips and tricks are can be the substitute for the mentor you never had. Additionally, practicing, reading advice from the experts, and adhering to basic trading fundamentals will help protect your portfolio and increase your likelihood of success. There is no such thing as having too much knowledge when it comes to trading.
Now, we’re going to share three golden intraday stock trading techniques for picking stocks.
How to Make Profit in Intraday Stock Trading
Making some money intraday trading is easy. However, making consistent money and keeping those profits is a bit more difficult. Ultimately, your success all comes down to what rules you use for picking stocks when intraday trading.
Our experts will share some intraday trading techniques for how to select stocks.
There are literally thousands of thousands of equities. You are likely wondering which intraday trading stock shares to choose. While there is no "best" stock that you can always rely on, there are many useful rules that can help you separate the likely winners from the likely losers.
When doing stock selection for intraday trading, follow these three rules:
- Select stocks with high liquidity – the big volume traded will allow you to buy and sell stocks without affecting the stock price.
- Select stocks with medium to high-volatility (the rate at which stock prices move up and down) – from an intraday perspective you need volatility, which will create enough profit margins to compensate for the risk-taking.
- Select stocks that are trading – buy strong stocks that are in an uptrend, sell weak stocks that are in a downtrend.
If you trade a small stock account, you need to be aware of the pattern day trader rule (PDT). Essentially, people with less than $25k worth of assets that make more than three intraday trades in a week (day trades) will be flagged as a PDT, which can affect how your trading activity is taxed and regulated.
Learn more about the day trading rules for accounts under $25k here: Day Trading Rules Under 25k - Know the Rules of the Game.
You may have picked the best stock in the world, but without a reliable intraday strategy, you’ll not be able to make a profit. Keeping this in mind, we’re going to share with you some guidelines for your entry and exit strategy.
How to Successfully Implement an Intraday Trading Strategy
One thing that most intraday trading strategies have in common is that they all rely on one important concept, known as the momentum burst. The most successful intraday strategy seeks to capitalize on that quick momentum burst on very short-term stock price charts.
The best way to identify a momentum burst is to highlight it on a stock price chart.
You can use the Know Sure Thing Indicator Strategy to buy and sell stocks focusing on the momentum burst.
It’s not enough to do our intraday trading research without first having put in place a framework that we can follow each and every single day. To help you out, below we will outline the best intraday trading rules that work every day.
Rule #1: Follow the Stock Trend
Stock market prices never move in a straight line.
There are up and downswing waves, especially on an intraday basis. The market is naturally volatile and, regardless of the broader trend, will experience both positive and negative changes within any given period of time.
To improve the odds of success always trade only those bursts of momentum that align with the long-term stock trend.
To put it simply:
- Buy stocks that are in a long-term uptrend.
- Sell stocks that are in a long-term downtrend.
Now, we know that intraday trends have the tendency to revers swiftly.
Professional traders that have specialized in taking intraday reversal signals can make money on this kind of setup. But we want to develop the best intraday trading strategy that even a novice can follow.
So, this time around, we’ll keep things simple.
The only complicated thing is isolating the intraday trend. That’s because some trading days are choppier than the others. To make things easier, check out how to identify a trend in real-time here: The Right Side of The Market - Trend Trading Strategies.
Rule #2: Wait For the Pullback
After we have identified the trend we look for price corrections against the trend. Pullbacks are inevitably, but the window to act may be limited. The emergence of a pullback will give us a window of opportunity to enter along with the smart money and ride the trend.
The most profitable intraday setups usually happen during the opening bell. Closing bells are also relatively busy.
You can shorten your window of opportunity by only looking for this type of setup around the open and the close.
Note* be advised that this intraday stock strategy uses the 1- minute stock chart.
Since there is no way to know where the pullback will end, we’ll need to keep a close eye on the market's finer movements.
See our next rule:
Rule #3: Consolidation Breakout Trade
We begin by waiting until the market goes quiet for about 3 to 5 minutes.
If you’re able to identify clear sideways moves where the market seems trapped, mark that region and look at what happens next. But, always keep in mind the context of the bigger trend.
To better keep in mind you seek those small consolidations where the stock price can be “boxed.” A chart speaks a thousand words.
So, check out the stock chart below:
Note* we only draw the box encompassing the body of the candles and excluding the wicks. The body of the candle is where the bulk of trading activity takes place so, we want to focus where the big money is.
Rule #4: Use the Breakout as your Trigger Signal
Since we established the trend is bearish, we are only looking to sell the stock, rather than buying the stock. This is consistent with the broader need to trade with the trend, rather than against the trend.
See the stock chart below:
Rule #5: Take Quick Profits
Intraday trading will offer you a short window of opportunity to capture your profits. In this regard, you need to cut your losses short once the trade starts moving against you. You will also need to "lock-in" your profits quickly, rather than hoping for them to move higher.
Our experts will share a simple but effective take profit strategy for quick profits:
- For long positions, take profit slightly above the most recent and significant intraday high.
- For short positions, take profit slightly below the most recent and significant intraday low.
See the stock chart below:
In the stock chart above, we’ve marked the most significant intraday swing low and the subsequent profit target. The same technique can be applied for long positions.
If the stock price is not trading you’re better off not to trade those markets with this strategy. For range trading, please check out Best Range Trading Strategy – Trading the Price Not Time.
Final Words – Intraday Stock Trading Strategy
In summary, intraday trading commands a disciplined approach and the right mindset for success. Using indicators, paying close attention to trends, and testing different strategies will help position you for lasting success.
The intraday trading strategies highlighted throughout this guide has the potential to generate a consistent daily income as opposed to stock investing. Secondly, these intraday trading techniques eliminate the risk associated with holding positions overnight. The main takeaway from intraday trading is that the rewards are high, but the risks can be high as well. If you only have a small trading account then you can grow your account a lot faster with these intraday trading tips and tricks.
Let’s do a recap of the intraday stock strategy and the rules you need to follow:
- Stock selection for intraday is key.
- Use 3 parameters for picking intraday stocks (liquidity, volatility, and stocks that are trending).
- Master one intraday setup and repeat every day.
- We have talked about entering in the direction of the long-term trend after a pullback and a short consolidation.
- Take profits quickly and cut losses short.
Thank you for reading!
Interested in learning more? Using the Best Combination of Technical Indicators can help make your intraday trading strategy more dynamic.
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