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Saturday, February 16, 2013

Intraday Trading Guide!


Could you please guide on Trading. Which are good stocks to trade on intraday basis? Also some tips on trading would be helpful.


Intraday Trading is a challenging task and an aspiring trader should have the infrastructure ready before you jump in the trading business. Things to do before you start trading:

1. Get fast trading terminals like NSE NOW or ODIN from your broker. Nowadays almost all brokers offer these terminals used by professional traders. Since intraday trading is all about speed and precision, webpage based trading sites would be slow for you to quickly enter or exit a stock. Trading Terminals such as NSE NOW or ODIN help you to enter or exit a stock with just one click.

2. It’s imperative to get access to live intraday trade data when you decide to trade markets on an intraday basis. Lot of traders use free websites which provide delayed quotes or rely on broker’s data, but you won’t be able to draw good quality stock charts and technical indicators using free websites or delayed quotes. It’s worthwhile to pay small fee to get access to high quality live intraday data to trade successfully and have that extra edge.

3. Trade a small number of stocks everyday and remain in your comfort zone. There are 160+ stocks in F&O segment of NSE, but a trader should focus on maximum 10 stocks to trade on intra-day basis. It’s not a good idea to move from one stock to another as you lose focus and probably end up trading stocks which are new to you and don’t fit with your trading style and strategy. Pick 5-10 stocks beforehand and trade just those to make money!

4. Back-test, Back-test and Back-test! Importance of developing your strategy and back-testing it thoroughly can’t be taken lightly. One should adopt only a handful of trading strategies and remain faithful to your strategy even when chips are down. It doesn’t help to change your trading style and technique everyday or as soon as you hit a Stop-Loss. Paper-trade your strategy for at-least a 6 month period, so that you have 1-2 robust strategies and remain loyal to your strategy to make money consistently.

5. Money management is imperative and is most important factor for you to remain in this business for long. Treat intraday trading like a business and risk only a small amount of money, preferably 2% on each trade. Meaning you can take a trade with your entire capital, but your stop-loss and net loss on each trade should not exceed 2% of your total account. This means that it will take 50 back to back losses to wipe out your account, which is almost impossibly. Lot of newbie traders bet their entire account with a single trade and wipe it out in a few trades thus getting out of trading before they could learn it well. 

Trade safe, trade long, trade profitably.


  1. Thanks for these suggestions.
    Can you please suggest a charting software for analysis and back-testing?. (other than excel).
    Can you please suggest a live data source?

    1. Hi,

      For Live-data source, some brokers nowadays provide reasonable quality Live-data. You can also search for some paid data providers. Typically it costs about 500-600 per month for live futures data. Should not cost more than this.

      For backtesting, for starters i suggest pore through charts manually. That will help to to understand what strategy works and what does not. Look through charts of past 6 months on a 30 min timeframe or whatever is comfortable to you and check your strategy. There are lot of free tools also available, but they may not be compatible with NSE data.

      Hope this helps.

  2. Thanks for the guide. For the detail about trading tips India you can do some research.


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