Intraday Trade Setup Strategy. |
Intraday as the name suggests is the trade that is executed within a day. That means you take the position in a particular scrip on a particular day and closed the same trade on the same day during stock market hours.
For example, Mr. Shah buys 50 shares of DCBBANK on 24 August, 2017 at a price of Rs.181.50; he wants to trade on an intraday basis, which means he needs to close this trade on 24 August itself.
So what does this close the trade mean? It simply means:
In the above example, Mr. Shah who has bought 50 shares of DCBBANK on 24 August needs to sell them on the same day before 3:30 P.M. (stock market timings).
Intraday has always been treated as a speculation. People say its gambling and no one can ever make profit doing intraday trading.
For example, Mr. Shah buys 50 shares of DCBBANK on 24 August, 2017 at a price of Rs.181.50; he wants to trade on an intraday basis, which means he needs to close this trade on 24 August itself.
So what does this close the trade mean? It simply means:
- Sell if you have bought initially
- Buy if you have sold initially
In the above example, Mr. Shah who has bought 50 shares of DCBBANK on 24 August needs to sell them on the same day before 3:30 P.M. (stock market timings).
Intraday has always been treated as a speculation. People say its gambling and no one can ever make profit doing intraday trading.
From Stocks94, here is one of the tested strategies adopted by many successful traders for intraday trading. Only a disciplined approach can help you trade and earn handsome returns in intraday trading.
Before we start the trade setup for intraday, let us see the basic requirements for this setup:
The strategy gives a confirmation on daily charts about trend and same strategy can be applied on 5 minutes, 15 minutes, and 30 minutes time frame to get an entry price and enter into trade. Once the trade setup is properly analyzed and entered while maintaining stop loss on each and very trade, a reasonable return on intraday basis is certain.
- 5 day and 8 day simple moving average lines
- RSI Indicator
- MACD Indicator
The strategy gives a confirmation on daily charts about trend and same strategy can be applied on 5 minutes, 15 minutes, and 30 minutes time frame to get an entry price and enter into trade. Once the trade setup is properly analyzed and entered while maintaining stop loss on each and very trade, a reasonable return on intraday basis is certain.
DCBBANK 1 year Daily Chart
In the above example, we can see the 5 day simple moving average line is above the 8 day moving average line, RSI is at the level of 45, which confirms that we can take a BUY at this price. MACD turning from negative to positive further confirms that this trade at this price can be entered.
So suppose you enter this trade: BUY DCBBANK at CMP of INR. 182. Now the next question that comes is what will be the stop loss? In intraday trading, generally the stop loss are kept at previous day low price. In this case, the previous day low was at the level of 178.
The target depends on case to case, But it is always good to maintain return of 2 percent from any trade setup you enter.
So in this case:
Target = 2% of entry price
= 2*182/100
= 185.64
So our trade setup is BUY DCBBANK @ CMP-182, TARGET 185-187, SL-178.
So suppose you enter this trade: BUY DCBBANK at CMP of INR. 182. Now the next question that comes is what will be the stop loss? In intraday trading, generally the stop loss are kept at previous day low price. In this case, the previous day low was at the level of 178.
The target depends on case to case, But it is always good to maintain return of 2 percent from any trade setup you enter.
So in this case:
Target = 2% of entry price
= 2*182/100
= 185.64
So our trade setup is BUY DCBBANK @ CMP-182, TARGET 185-187, SL-178.
This is a simple intraday trade setup strategy. This strategy works very well in a time frame of 15 minutes, 30 minutes, 1 hour, and 4 hour charts.
