Bill Williams is the creator of some of the most popular market indicators: Awesome Oscillator, Fractals, Alligator, and Gator.
9 Free Intraday Tips for Traders
2022-07-25 • Updated
Information is not investment advice
Intraday trading, also known as day trading, is about buying and selling assets on the same day.
In other words, if you place a buy or sell intraday order, you take advantage of the price movements on that trading day and close your position before the end of market hours. Intraday traders aim to earn quick short-term profits.
To succeed, you need a strong intraday trading strategy.
Here are some tips, which will help you to become a successful intraday trader:
1. Choose the right assets
Intraday traders usually pick assets depending on the volatility. Generally, it’s better to pick assets with high volatility as they provide more opportunities to earn.
To find assets with upcoming volatility increases, traders should use the economic calendar as prices usually fluctuate during major events.
This tool also helps to define the markets’ sentiment, which might help predict the trend.
After a trader picks the asset, she/he should make technical analysis, define the trend, find the best entry level, set profit targets, and Stop Loss.
The benefit of being a day trader is that you can choose from a range of different timeframes, depending on the liquidity of your chosen market, the amount of time you have to make your trades, and your preferred trading strategy.
2. Never change the entry and exit price
Have you ever regretted a decision you made immediately after executing it?
Sometimes traders start having second thoughts and doubting their decision. They feel that an entry point wasn’t as good as she/he believed when entering a trade.
To avoid making such mistakes, a trader must decide on an entry point and a Take Profit level before entering the market.
It would be best to plan your trade without letting your emotions dictate your decisions.
3. Set a Stop Loss
When you open a trade, the price can go either way.
Therefore, a trader should decide how much loss she/he is ready to bear if the trade goes against the target.
There are several ways of setting a Stop Loss. The most popular ones are setting a Stop Loss at the key level behind an entry point and calculating the risk-reward ratio.
4. Take profit when the price hits a target
Greed is every intraday trader's enemy because it only takes a few minutes for the market to switch sides, especially if it’s too volatile.
The secret to successful intraday trading is a high leverage which helps to increase profits (as well as losses). However, the trick lies in resisting greed once that target is reached. Don't wait for the price to increase further if it has reached your target.
There are two options a trader has if she/he is sure the price will keep the momentum:
- divide the position and set several targets;
- adjust the Stop Loss trailing it after the price as the price moves in a trader’s favor.
5. Close positions at the end of each day
If a trader opened a position for an intraday trading based on a current day market trends and technical analysis, it might be a bad idea to hold this trade overnight. A new day might start with fresh news, which might reverse the trend.
The news wouldn’t affect intraday traders post-market hours as they might have already squared off their position. It helps them eliminate the overnight risk of losing any capital.
6. Don't trade against the market
The trend is a trader's friend.
Don’t get married to your analysis. Fluctuation is the very nature of any market. If the market is not supporting your analysis, sell and exit your position as soon as it hits your Stop Loss level. Holding on to the hopes that the market will act as you predicted can increase your losses.
7. Timing is crucial
Profits in intraday trading depend heavily on the time factor. One of the best intraday trading tips is not to take a position within the first hour of trading for the day. The volatility tends to be high at this hour, which leads to heavy rush and noise in the first market hours. Many experts prefer to stop trading one hour before the US trading session opens and start trading one hour after its start.
To sum it up, to make the best of intraday trading, you must first learn how to make the right move at the right time. The best way to master this skill is by being attentive to details and understanding the market's mood in the morning, at noon, and at the end of the day.
8. Choose the right platform
Intraday traders make frequent multiple transactions and accrue gains daily. You should choose the right platform that allows quick execution and charges minimal brokerage.
Generally, a trader must pay spreads and commissions to open and close a trade. Fortunately, FBS offers one of the lowest commissions and zero spread accounts.
9. Follow your strategy
As we mentioned before, discipline is the most important factor in becoming a successful intraday trader. What better way to become disciplined than by following rules?
Every trader has to have a strict strategy, which includes:
- Entry lot size.
- Technical signal for entering a trade (for example, if the 50-hour moving average crosses the 100-hour moving average from below, a trader will open a buy trade).
- Risk-reward ratio.
- Technical signal for closing a trade (for example, if the 50-hour moving average crosses the 100-hour moving average backward, a trader will close a trade).
- Stop Loss placement rules.
A new trader should start with a small amount and test a strategy. As soon as a strategy she/he uses allows making stable profits, a trader might increase a lot size.
Being an intraday trader is about patience and discipline. By following these 9 tips you can improve you trading results and become a pro daily trader.
Open an account and start practicing now!
Trend strategies are good - they may give significantly good results in any time frame and with any assets. The main idea of the ADX Trend-Based strategy is to try to catch the beginning of the trend.
Counter-trend strategies are always the most dangerous but also the most profitable. We are pleased to present an excellent counter-trend strategy for working in any market and with any assets.