How do you select stocks for intraday?
If you want to become a trader, one of the main questions that comes to your mind is how to select the stocks for intraday. if you choose a random stock, you might face a loss in that. so here we are going to cover the significant 3 steps which will help you to choose the best stocks for intraday.
First, you need to choose a brokerage company to do intraday trading. If you plan for intraday, the best option is to look for discounted brokerage firms like Zerodha, Upstox, Angel One Etc. These brokerage firms help you to take intraday trading at fewer brokerage charges.
There are a few ways you can select the stock for intraday. The first one is by analyzing the trend and charts of the stocks which are chosen, in this stage, we analyze the stock before the pre-open markets (9.00 a.m. to 9.10 a.m.) start or you can do it one day prior. The second method is by analyzing the pre-open markets we can choose what stocks need to be selected. The third method is when the market is opened, depending on the trend and charts we select the stocks for trading here we are going to analyze these points deeply.
When you want to make a profit from a trade you need to look for important things in the stock.
What are the important areas we need to look for
- Breakouts
- Momentum
- Trend
- Pullbacks
If you want a safe trade choose a target between .50% to 1 %. Many of the discounted firms are giving x times leverage (depending on the brokerage firms some of the companies give 5 times). if you use the leverage you can target smaller points and easily exit from the trade without hitting the stop loss. For that, you need to look for stocks that are trendy and which have more momentum.
First, you need to look for this point and add those stocks to your watchlist.
1) Choose the stock before the pre-open market starts for intraday
You can look for stocks with high momentum and trending. You can take the help of the Nse website to understand the various data like open interest( for futures and options), Top gainers, and Top losers, also there are many scanners available to give the most important information like top gainers, bullish stocks, bearish stocks, top losers, etc. From there, you can get an idea about the high-performing stocks that will help you to get some stock names to add to your watchlist.
Once you made a watchlist you can check for some analysis. You can take the help of technical analysis like a candle (mostly select the higher time frame candle which gives more direction)analysis and indicator (mostly you can choose 200 ema to get the direction) confirmation to get a more accurate trade. You can draw a trend line by connecting the higher highs and higher lows. and lower highs and lower lows.
You can follow news from channels like CNBC and Moneycontrol. Some news can cause more damage to the market. So you can analyze the stocks to if there is any news comes from the stock that you selected. You can also check the global market to know the trends of markets.
followed by all these you can analyze and choose the stocks that you want to trade once the market opens. from these, you can take a successful trade. Maintaining these steps and marking the right target will help you to give a good return. You can select around 5 to 10 stocks which will help you to execute the trade earlier.
2) Choose the stocks from the pre-open market for intraday
You will get the pre-open market data from the NSE website. If you go to the NSE website and click the Market data, From that you can select pre-open market. so you can find various data like the previous day’s close, pre-market price, % of change, etc details you can find out from the pre-open market.
These pre-open markets will help you to identify whether the market will open at a gap up or a gap down. From these, you can identify the stocks that are going to have more movement in the normal market these stocks also can be added to your watchlist. Also, you can check the stocks you have already added to your watchlist, if those stocks are present here you can select those stocks, if you find new stocks then you need to do a quick analysis which we already explained earlier.
3) Choose the stocks from the live market for intraday
if you are not able to follow the above steps you can select stocks directly from the live market. Once the market opens at 9.15 you can choose the stocks from the top gainer’s or top losers’ data from the NSE website. add some stocks from that list to your watchlist. You can find the entry using technical analysis like candle chart analysis. You can check the stocks by adding indicators like MACD, RSI, etc. You can enter the trade if you are getting any indicator support for the selected stock.
Another method is using a price action strategy. if you get the best stock name you can draw patterns in that stock and wait for any breakout or breakdown to enter the market. you can select multiple stocks and draw patterns, if you get any indicator confirmation along with a breakout or break you can enter the market which will give more accurate trade.
Conclusion for intraday
When you plan for intraday trading the first step is to identify the stocks. You can select the stocks in different ways. one is high-performing stocks from the NSE website, second one is based on the pre-open market data. the third one is based on the performance in the live market data.
You can select any of these methods but you need to follow certain steps after you select the stock. you have to identify the trend of the stock by drawing the line in the charts, you need to follow the price action method or indicator method or combination of these two, and based on these enter the trade, you need to wait for the pattern breakout or break down if you are following price action. if you follow the indicator you need to wait for the confirmation.
when you enter the trade you must follow stop loss. if anything goes wrong you need to protect your capital from huge losses. for that strictly follow the stop loss. Also, follow the target price in a certain % inside for example you can set your target as 20 % or 30%, etc.
When you follow discipline and the best trading strategy you can be a successful trader in this market