Rules for Picking Stocks When Intraday Trading

4 stars based on 51 reviews

I have 2 brothers and both dabble in the stock markets and was lucky that one of my brothers mainly invests and the other trades options actively. I started my stock market career day trading in stocks with margin and also small bits of short-term trades. So I would have to thank my brothers for introducing me to the markets. Had a few lucky trades to begin with, but was never successful trading equity, blowing up my account a few times in the process.

Most of the trades were based on guts and some on tips given on TV. How to pick option to trading stocks for intraday did you manage to continue trading when you made these losses and for how long?

I was having a good job and that allowed me to stay active in the markets, adding trading capital from my salary at the end of every month, it was a blessing in disguise. I started trading in early and this method of trading continued till May when there was a sudden fall in the market which was a big setback not only for my day trades but also on my delivery trades, which I exited in panic. This incident was an eye opener on how trading based on news, watching TV or on a hunch can never really be profitable unless I had the news before everyone else did.

This is how to pick option to trading stocks for intraday I got introduced to Technical Analysis and it started off with learning candlesticks.

As and when I learnt more about technical analysis, I suddenly felt that it is possible to have systems based on strategies which can run like a money making machine removing all human emotions.

It also helped that I was good at shell scripting and the automation background helped me put up a few systems. You could say that I have tested over strategies from then to now. Most of the results were based on open price, but the open price that you see to what you can actually get while trading the markets has a huge variance.

What also adds to this are the slippages, brokerage costs and other taxes. Around the same time I also got introduced to Futures and Options and found out that I was better at intraday trading and hence most of my positions were never carried overnight.

This is what I have been following for the last how to pick option to trading stocks for intraday of years and it has been doing well for me. Most of my trades how to pick option to trading stocks for intraday option trades and hence along with looking at technical charts, I also started mixing it with a strategy based on how to pick option to trading stocks for intraday interest, implied volatility and option prices.

Basically the strategy using the data predicts which side of the option is skewed to move up, either calls or puts and also the strike price best positioned for this. Since the strategy revolves around spotting traps or option skews as mentioned above, typically most of the trades would be counter trend trades. I personally find that being long options really works well for such a counter trend system.

There are some gut based trades, but I mostly stick with trades given by the system that I follow. But the critical thing is to accept that we as humans can make mistakes and can get carried away, so it is best to keep only that much money in your trading account that you can afford to lose, especially when trading in options.

When you hold options overnight, the time decay happens faster and if you trade in-the-money options, the absolute return when you are right on your trades is not much. Also one of the things that I avoid as an option buyer is to pyramid, that is add to existing open option positions as and when it goes in my favor. When you buy options you are fighting time, volatility and price moves, so I personally never liked pyramiding and always lost when I did.

There are times when I do carryover options, how to pick option to trading stocks for intraday I reduce the size significantly. Also the option position carry forwarded is not because it has made a loss, so let us hold it to the next day hoping how to pick option to trading stocks for intraday it recovers. It is mainly because the gut sometime says that there is more in the trade left to play out. Out of the money options only? That is very high leverage, are there any money management rules?

Leverage is a double edged sword, but a very important part of the business. One book which was an eye opener for me was on Position Sizing by Van Tharp. In terms of how much trading capital, I follow a unique strategy. I come up with an assumptive trading size for my account based on my risk appetite, assume this is 10 lakhs. But as and when there is profit added to this Rs 1. Usually I will withdraw profits from the trading account if the account size reaches between 2 to 3lks to bring it back to 1.

Today I can afford to take this risk having a cushion of a full time job; I might change this strategy by a small bit if I were trading full time. My trading activity picks up quite a bit as and when the market approaches expiry and is mostly in Nifty options because of the higher liquidity.

It is very important to not treat this as lottery money and spend it. I look at it as a normal income and use it to supplement my financial goals. There is no system that can guarantee you return, in the last 1.

It is important to understand this and hence manage your risk accordingly. Trading is like a profession, people take it lightly especially because of the low entry barrier. To be able to reach that assumptive trading size where I can quit my job and become a full time trader. Thanks, Rajesh, for the insights and hopefully your good run in the current day challenge continues and be able to trade full time soon.

Love playing poker, basketball, and guitar. Thanks Zerodha for sharing this …. It contains Lots of Value and very helpful for the people who are there in this market…. How to pick option to trading stocks for intraday and Thanks for sharing your thoughts Rajesh!!! Wish you all the best for your future plans. Because of his natural talent he is gonna achieve greatness. I see him as a teacher. You say correctly that Full Time job is a blessing in a disguise. But how you are able to do Day Trading with FT job?

How you are able to manage daily screen time required for day trader along with FT job? How about charts-on mobile? Most of the time, the major moves happen within the how to pick option to trading stocks for intraday one hour of market open and again in the last one hour.

Being in software industry where you have flexible timing helps a lot here and the day is still long after market hours! For tracking other parameters on the OI and IV skew, I use the system built inside my website tripleint. An iitan is paid atleast 30 lakhs per annum sal. He does it because he has the potential. He gets satisfaction from it.

Why do you play chess? I am retired aged 61, earning a pension. And i trade options. Because i am not yet brain dead. Money is not always the main motive. Wish you all the best for your future trading plans. I hope this article is very inspiring for all of us! My problem is getting uninterrupted internet connectivity and reliable tick by tick charts for intraday trading. I am based in Mumbai western suburbs. I use the live proprietary system developed to track OI and IV skew defined in my website tripleint.

Most of the analysis is based on EOD charts, levels, traps and research is to select the right day for placing the trades. During the day the live Option system and price levels are used for timing the entries. Thanks to Zerodha for how to pick option to trading stocks for intraday my interview!!!

For people who have been asking details on the option trading system and methodology, please visit my website at tripleint. Thanks again for all the likes, shares and encouraging words!!! I almost have similar background as yours IIT, M. I am interested in building a trading system. Can you throw some light on how to proceed. Did you build your own trading system?

Is there a mechanical way using which you search for traps? Will be very grateful of you can share your technique. Rahul — For traps, not using a mechanical way of finding it out and I have explained the details in my blog http: Under Categories you can find articles for bull and bear traps.

Please find some scholarly articles at http: Each have their own advantage how to pick option to trading stocks for intraday disadvantage as has been explained.

The articles might help you to understand how each of the parameters of OI, IV and direction decides the option price and you can then decide on which strike suits best for what you are looking for.

Best wishes to you! Mr Shirish — Thanks for your message! Expecting a return of risk free rate is far too less to consider for any business and to maximize that we use the power of leverage.

Trading is to be considered more of a business and to begin with, one needs to start off only with the capital one can afford to lose.

In all probability there will be multiple times when one goes bankrupt in the trading account and it is continuous learning and perseverance and might take a few years before one could zero-in on the strategy and markets that one would be trading profitably. Derivatives as a product itself is designed to factor in leverage and so handling risk: Being a personal trading account, one would not want to reveal the absolute value and that is the reason why returns are talked in terms of percentages.

I have been trading from past 1. I always end up losing money just because of these traps. The most common mistake i always do is i carry my position overnight, that has killed my account literally.

Trading volatility options strategies

  • Why combine queries access 2013

    Best online trading platform ireland

  • Amplitude shift keying binary signal space diagram

    Mercado de divisas opciones binarias

Miglior software di trading per i principianti

  • Top 10 free binary options signals

    Options course qatar airways pilot

  • Forex trading companies in delhi

    Exbino supported languages

  • Binary option trend charts 5 min trades beginner winning numbers

    Optionweb option binaire montreal

Binary options hedging and arbitrage binary options strategy

44 comments Financial trading software

Binare optionen handelsplattform mit demo-konto

How to pick stocks to trade with trend for intraday. Can you please give more views on this. Best strategy or indicator to start day trading everyday. Everyday is a New Day in Intraday Trading. Market Runs on Sentiments. Intraday is a game of Uncertainty. You never know What will happen next moment. Everything Looks good on Chart but very next moment Stock goes down and eat all the Stop-loss and make a day high in no matter of Time.

You have to cut your loss and make a One Good Trade. Loss is a part of Intraday, you have to face it but try to cut as soon as possible. Intraday have only 2 options either you Win or lose. You Get only one opportunity in Intraday also there is a Clock ticking till 3: All the Indicators are giving Buy signal But he knows the stock Sentiments and also know Price Movement of that stock very well. He will use his experience and Sell the Stock because he know the Stock will not go above this there will be No fresh New Buying at this Higher levels.

He also knows the Right time to Exit. And In no matter of time stock will drop very fast the time he will understand why stock is going down it will trigger his Stop-loss. You have to look at the stock price and understand the price movement before you enter into a position, and use Nifty as a point of comparison only.

When it comes to indicators. But you have to note that indicators only facilitate your trade, they are not the decision makers. You are the only decision-maker here and you have to spend time getting a grip of the overall stock scenario to have a more holistic trading experience. Ok thanks, I see stock price dragged down when Nifty in downtrend even stock in up trend. Problem with trading stocks is that stock price is affected by macro news, stock specific news, movement of sectoral index that the stock is part of, movement of nifty, technical levels of stock etc etc.

If some people think that stock is moving up because of some EMA crossover or RSI, then markets will show you the mirror! Technicals only follow stocks price movement.

Yes an EMA crossover of stocks price closing above 50 dma, , dma can be considered as a positive indication. But technicals provide better judgment for long term time frame. Markets rallied today because of a trigger, and the control of this trigger lies in the hands of FIIs. I have been repeatedly telling that FIIs will never drive the markets against them!!

No technical indicator ever exists which could tell you that today sensex will rally some points. No matter the number of factors affecting the stock, all of this shows up only in one place - the stock price. Indicators only facilitate your trading and it will work only after you understand the price movement in the stock.

But in my experience trading the index nifty itself is much more easier than trading stocks because individual stock news will not effect the index as much as it affects an individual stock.

I find individual stock movement highly erratic and many times totally confusing. Stock trend is up nifty trend is down should i buy the stock or go short?

Both nifty and stock trend is up we buy the stock some negative news in the stock comes up and the stock zooms down, so on and so forth. Clarity of thought helps me a lot while trading. Stocks can give huge percentage gains once in a while but I prefer the index as it is much more stable and respects technicals like support and resistance, price patterns etc more often.

Ideally one should only look at the stock movement while trading the stock and use the index as a reference point only to get a sense of the larger picture. Just like how you only watch the index while trading the index. This is exactly why they say we should trade according to our personality. What works for me may not work for you and vice versa. Also our individual experiences while trading also play a role in our choice.

They seem to just hover in a small range and only correct during the results. Rather a couple of technical analysts gave a recommendation to short nifty!! Its a matter of seconds for FIIs to set the direction of our markets.