What exactly is intraday trading?
Best stocks for intraday: Intraday trading occurs when a trader buys and sells shares or other trading instruments on the same day in order to profit from stock price movement during the day. In brief, a trader cancels his open deals before the trading session ends. He does not take any nighttime risks that may jeopardize his riches.
Because of the growing number of demat accounts, intraday trading volumes have increased dramatically in recent years. Trading expenses have been cut significantly as a result of discount brokers charging a small fee compared to established brokers. Intraday trading was also boosted during the Covid-19 lockdowns. Individuals who were confined to their houses turned to day trading as a source of income. Intraday trading is allowed in all segments, including cash, futures and options (F&O), commodities derivatives, and currency derivatives. Leveraged positions can also be taken in equities that are not available in the F&O segment.
Although while intraday trading eliminates overnight risk, there are additional risks such as unexpected news during trading hours, instrument illiquidity, and variable volatility of the instruments. Additional elements such as trading strategy, money management, and risk management all have an impact on a trader’s long-term success.
Profits and losses in trading have an impact on human psyche. The capacity of a trader to make decisions is heavily influenced by his mental state. Due to significant gains or lengthy winning streaks, high optimism or overconfidence might lead to taking larger holdings. He may take large risks or maintain losing positions over an extended period of time in the aim of breaking even.
Similarly, despite the appropriate trading setup, recent losses or a series of losses might lead to taking undersized positions. He may even cut profitable investments early. As a result, it is critical to trade based on a trading plan rather than on emotional bias and gut reactions.
Considerations for Choosing the Best Stocks for Intraday Trading
There are several factors to consider while picking the best stocks for intraday trading.
Traders must first assess how much risk they are ready to take on with each deal. They should also restrict the amount of available posts. Handling numerous transactions can become complicated when long and short contracts are open in various equities.
If you’ve made a trade based on a technical setup, it’s a good idea to see if there’s a corporate event coming up on the same stock. This examination should be performed on a regular basis. Such occurrences bring with them both obstacles and opportunity. Regardless of the conclusion, it is important to stay up to date on any upcoming events.
Liquidity and volatility
Volatility and liquidity are also important factors in intraday trading. High volatility indicates huge price swings during the day, which offers more trading possibilities. When the level of volatility is low, the opportunities for trading are reduced. Volatility should not come at the expense of liquidity, as liquidity is essential for day-to-day entrance and exits.
Traders should avoid equities that are very volatile and have a little trading volume. Sometimes dealers are caught on one side of the trade. They are unable to depart owing to illiquidity or circuit limitations.
The disparity between bid and ask prices can sometimes be large enough to effect trading expenses. This occurs on sometimes in lightly traded penny stocks, as well as index and stock options.
The behavior of equities is ascribed to volatility. The volatility pattern should not be observed in the context of a certain day or week, but rather equities that have a history of turbulent trading and are heavily traded should be chosen as trading possibilities. One such stock list is provided below.
Best stocks for intraday today India
The Axis Bank
Axis Bank is India’s third-largest private-sector bank, offering a variety of financial products. It has 4758 branches, a large ATM network, and 10 overseas offices. It is worth Rs. 2,90,167 crore on the stock exchange. The stock’s usual trading range is 2 to 4%, with a daily turnover of more than 1400 Cr. The stock has a daily trading volume of around 7,063 million shares.
Bajaj Financial Services
The market capitalisation of the firm is Rs. 4,04,082+ crore. Around 55.86% of the overall shares are owned by the promoter group, while mutual funds, other institutions, and the general public hold the remaining 44.13%. The stock’s typical daily range stays around 1% to 3%, with a daily turnover of more than 2400 Cr. The stock has a daily trading volume of more than 901 lacs.
The company Bharti Airtel
The company’s market capitalization is Rs. 4,85,607 Cr. 55.14% of the total shares owns by promoter group, and remaining 44.85% held by FII, public and mutual funds,. The stock’s daily range is 1.50% to 3.50%, with a daily transaction of more than 1100 crores. The stock has a daily trading volume of 4,408+ million shares.
The bank has a market capitalization of Rs. 94,828+ Cr., with the promoter group holding 16.51% of the shares and the remaining 83.51% held by FIIs, the public, and others combined. The stock’s typical trading range is 1% to 4%, with a daily transaction of more than 1300 crores. The stock has a daily trading volume of around 2,038 million shares.
Jindal Steel & Power Limited
The firm has a market valuation of Rs. 56,217+ crore, with the promoter group owning 61.20% of the shares and mutual funds, FIIs, and others owning the remaining 38.79%. The stock’s typical daily trading range is 2% to 5%, with a daily transaction of more than 280 crores. The stock has a daily trading volume of around 2,366 lacs.
Tata Motors Ltd
Tata Motors’ market capitalisation exceeds Rs 1,49,825 crores. The promoter group holds a 46.40% stake in the corporation, whereas the rest of the ownership is split between FII, insurance companies, and the general public, accounting for 53.60%. On a typical trading day, the stock fluctuates between 2.50% to 5%, and the daily turnover exceeds 1300 crores. The stock has a daily trading volume of about 20,000 lacs.