Stock Market Technical Analysis is very important nowadays because usually traders buy and sell shares throughout the day to gain margins and close their positions at the end of the day which is called as intraday trading and these traders are known as intraday traders. Normally, intraday traders will look to get profits on stock price movements in small sessions in trading by using leverage or margins. An intraday trader holds a stock for a varied length of time ranging from few seconds to a day. Large amount of stocks are required in such trading so that a minor change in price makes it worthwhile. Intraday traders make use of various strategies that may help in trading on the stock market.
Intraday Trading Strategies include
Scalping
In intraday trading, scalping is an important style of investing, which is very popular. It includes selling of a stock pick instantly when the trade turns profitable. This takes place after the stock increases by just a few cents. It does not seem much but if carried on number of times with huge capitals then it adds up to huge profits while maintaining time with a strict exit strategy to limit your losses.
Momentum
Momentum trading, yet another type of trading strategy, that involves stock picking shares, which are moving in a significant direction on high volume. Traders check out the advantage of the stock picks momentum and roll it up until the point where a reversal trend may start. Using this momentum technique in intraday trading, the trader holds onto the stock for a small period of a day depending on how the stock moves. The trader will find a break out, which is the signal for him to buy the stock. It is not so important about hitting the bid price and trader can let a few breakouts pass before he/she gets in through the market order. When the stock suddenly starts dropping down, the trader sell out quickly to cut down the losses. They usually do not wait for the stocks to go up again, as this may prove quite risky or incur greater losses.
Technical Trading
Technical trading is another type of intraday trading style. When using this technique, traders look at the technical analysis to decide what direction the stocks will move in and out. They carry on chart analysis on stock charts and historical data on price and volumes of a particular stock. They try to find out the similarities in the way the stock trade in the past with the present. By going through this, they can find areas where a stock can reverse its direction. Various technical indicators are used by these traders to help them predict how the stock price will shift in a few minutes or a few hours.
Intraday Trader Software
Apart from these techniques, traders also take help of Intraday Trader software to avail maximum benefits. Intraday trader system provides guided experience and supports the full round trip of a trade for possible targets while allowing the trader to track these to a close. Thus, it is also one of the most preferred and useful tool for traders and investors.