Top 5 Intraday Trading Strategies That Every Trader Must Know

Intraday Trading Strategies

There are different strategies which can be followed while trading in stock market. Some of the common strategies which are followed in intraday trading are:

  • First hour strategy: In the first hour strategy the trade in the first hour is watched. The high and low of the first hour is marked and then the trade after the first hour is watched. If a breakout occurs after the first hour the trend formation is assumed to happen. For example if the breakout happens from the high an uptrend is assumed to be continued. On the other hand if the downtrend is formed with a breakout from the low value a down trend is assumed to be formed and continue. Thus appropriate long and short positions can be taken.
  • Breakout strategy: In the breakout strategy the breakout from a Stagnate fluctuation is watched. If the breakout happens from higher value an uptrend is assumed to be formed. Similarly a downtrend is assumed to be formed in case of a downfall movement. Appropriate long and short positions can be taken on the beginning of these breakouts.
  • Gap Strategy: In the Gap strategy the gap between the close prices of previous day and open price level of today are calculated. These gaps can be positive or negative and can also have a small or large magnitude. Based on the type of gaps the long and short positions are taken after the initial hour of trading. It is an effective strategy and is used by many traders.
  • Spread Technique: In spread technique the same stock is bought and sold at the same time. This is a conservative way of trading and gives profit to the trader when the trend continues in one direction for a longer period of time. Spread technique is used mostly in the case of futures contract. There can be different type of spreads like inter market spread and inter exchange spreads.
  • Trend based trading: This strategy is followed by mostly beginners. The trend is assumed to continue in a direction and one should trade with the trend and not against the trend. Trend trading seems beneficial in most of the cases.

The above are some of the strategies which are used for trading in the intraday market. Different analysts in the field of stock market advisory field use the above techniques along with others to give stock market tips.

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