Intraday Trading Tips and Tricks for Beginners

Strategies for Choosing Intraday Stocks

How to Predict Intraday Trend - 

To analyze the live market trends on the NSEINDIA site, follow these steps: 

1. Go to the NSEINDIA site at 9:25AM. 

2. Select "LIVE MARKET" and then go to "Live Analysis." 

3. Choose "Advances and Declines." 

4. The greater side will indicate the trend if the difference between Advances and Declines is 200 or more.

We can access all the relevant details about the 52-week high, low, bulk, or block deals, and stocks hitting the upper and lower price bands directly from NSE via live data.

How to Choose Stocks for Long-Term

It is essential to also evaluate the following criteria to assess the health status of a stock for long-term investment:
- EPS should consistently increase year by year
- Book Value Per share should show a consistent upward trend annually
- Total Debt to Equity Ratio should be less than 0.50
- Current Ratio should exceed 1.50
- Price to Earnings Ratio should fall between 15 to 30
- Price to Book Ratio should be less than 1 or equal to 1.

Please note that the Stockedge app, NDTV Finance, Money Control, etc., can provide the above information for a particular stock.

How to Find Stocks for Intraday Trading/Day Trading

1. Download the stock data for NIFTY50 & F&O stocks from NSEIDIA at either 9:20 AM or 9:30 AM. Additionally, the data for the top losers and gainers at that specific time should be gathered.

2. Identify stocks with "OPEN = LOW" (consider buying) and "OPEN = HIGH" (consider selling) using the formula "=EXACT(A1,B1)".

3. Verify if there are any recent news updates for the selected stock. If positive, the indicator may not function as anticipated.

4. Whenever a selected stock breaks out its 52-week high, it signifies an upward trend, indicating a need to buy that particular stock.

5. Whenever a selected stock breaks out of its 52-week low, it denotes a downward trend, indicating a need to sell that particular stock.

- If NIFTY is >+25, it indicates a strong upward trend, prompting stocks to move upward. 

- If NIFTY is <-25, it indicates a strong downward trend, suggesting stocks will move downward. 

- If NIFTY is between <-25 and >+25, it reflects neutral market conditions where stocks will move sideways.

- If NIFTY is <-25, it indicates a strong downward trend, suggesting stocks will move downward.

- If NIFTY is between <-25 and >+25, it reflects neutral market conditions where stocks will move sideways.

Make sure to refer to the chart to determine the trend - if it's up, consider buying, and if it's down, think about selling.

"Always sticking with the trend is an absolute must. It's a fundamental rule to keep in mind."

6. To determine if any BULK / BLOCK orders have occurred for the selected stock, we need to assess the activity of FII, DII, and Mutual Funds. If these entities have placed BUY BULK / BLOCK orders, the stock will likely experience an increase. On the other hand, if they have placed SELL BULK / BLOCK orders, the stock is expected to decline. A crucial point to note is that a high BUY volume will lead to stock growth, whereas a high SELL volume will result in a stock decline.

7. To analyze a stock, it's important to review indicators like RSI, CCI, William %R, etc. This can be done using the Stock Edge app or in.investing.com. In addition, it's beneficial to examine chart types such as MACD, Stochastic, Bollinger bands, etc. These can also be accessed through the Stock Edge app or in.investing.com.

8. To identify potential trading opportunities based on stock gaps, it is crucial to monitor for gap up (short order with a target of the previous day's close) or gap down (buy order with a target of the previous day's close). Establishing a stop loss level between 20% to 50% of the 5-day ATR is recommended to manage risk. Notably, gap sizes equal to or below 20% of the 5-day ATR tend to fill rapidly, while the win rate decreases when the opening gap size exceeds 40% of the 5-day ATR. The formulas for identifying gap up and gap down are as follows: - GAP UP: Today's Open > Previous day High - GAP DOWN: Today's Open < Previous Day Low By incorporating these factors into your trading strategy, you can make informed decisions regarding gap trading. Please feel free to reach out if you have any further questions or require assistance.

Notably, gap sizes equal to or below 20% of the 5-day ATR tend to fill rapidly, while the win rate decreases when the opening gap size exceeds 40% of the 5-day ATR. The formulas for identifying gap up and gap down are as follows: - GAP UP: Today's Open > Previous day High - GAP DOWN: Today's Open < Previous Day Low

By incorporating these factors into your trading strategy, you can make informed decisions regarding gap trading.

Please feel free to reach out if you have any further questions or require assistance.

Kindly download NIFTY 50 & F&O stocks information from NSE at 4:01 PM daily for comparison with NSE tomorrow's 9:15:10 AM stock open price. Thank you.

Tips and Tricks for Trading

1. Based on market analysis, specific situations indicate high or low probability trading opportunities, depending on the price gap and trend context. When there's a gap in price into supply after a rally in the context of a downtrend, it presents a very high probability of shorting opportunity.

2. Conversely, a gap up in price during an uptrend is a lower-probability shorting opportunity and might offer a buying opportunity on a pullback to demand, especially with a significant profit margin above.

3. Similarly, a gap in price into demand after a decline in the context of an uptrend represents a very high probability of buying opportunity.

4. On the other hand, a gap down in price during a downtrend poses a lower-probability buying opportunity and may, in some cases, be a shorting opportunity after a rally into supply when there is a significant profit margin below. Such market insights can guide informed trading decisions.

5. Please check if the selected stock is reaching the Upper Price Band or Lower Price Band on the NSEIDIA Site under Live Market --> Live Analysis. If the stock is hitting the Upper Band, it indicates a BUY Signal. Conversely, if the stock is hitting the Lower Price Band, it indicates a SELL Signal. If the stock does not exist in the list, there is no need to consider this check.

Intraday Trading Tricks Based on Pivot Point Trading Strategy

To identify support and resistance levels for a stock, we can employ the Pivot Point Strategy and Gann Calculator Strategy.

The Pivot Point Strategy entails the following:

i. If the stock is trading below the pivot point, it indicates a potential opportunity to sell the stock.

ii. Conversely, if the stock is trading above the pivot point, it may be an opportune time to consider buying the stock.

iii. It is essential to consider the previous day's high, low, and close values in this strategy to make informed decisions.

These strategies provide valuable insights for trading stocks and navigating the market effectively.

Pivot Point Formula For Trading

Pivot points are calculated using the following formula: PP = (High + Low + Close) / 3. Once we have the pivot point, we can then calculate other key levels.

The first resistance level (R1) is obtained by multiplying the pivot point by 2 and then subtracting the day's low: R1 = PP * 2 - Low. The second resistance level (R2) is calculated by adding the difference between the day's high and low to the pivot point: R2 = PP + (HIGH - LOW).

On the other hand, the first support level (S1) is obtained by multiplying the pivot point by 2 and then subtracting the day's high: S1 = PP * 2 - HIGH. The second support level (S2) is calculated by subtracting the difference between the day's high and low from the pivot point: S2 = PP - (HIGH - LOW).

These calculations are commonly used in technical analysis to identify potential support and resistance levels for a given security.

Gann Calculator Strategy

The Gann Calculator Strategy involves the following steps for making informed trading decisions:
1. Approximately 30 minutes after the Stock Market opens, acquire the VWAP (Volume Weighted Average Price) of a specific stock from the NSEINDIA website.

2. Input the obtained VWAP into the Gann Calculator. This will generate Buy/Sell points as well as Support and Resistance levels for the stock.

ADX ( Average Directional Index ) Trading Strategy

The Average Directional Index (ADX) is a technical analysis indicator that measures trend strength without considering trend direction. It is often used on 1-minute (preferable), 5-minute, and 15-minute charts. In conjunction with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), the ADX helps chartists determine both the direction and strength of a trend.

The ADX system comprises three components: ADX, +DI, and -DI. The ADX specifically measures the strength or weakness of a trend, rather than its direction. An ADX reading above 25 suggests a strong trend, while a reading below 20 indicates a lack of strength. ADX values between 20 and 25 represent a gray area of uncertain trend strength.

In trading scenarios, a buy signal occurs when the ADX is at 25 and the +DI crosses over the -DI, while a sell signal is generated when the ADX is at 25 and the -DI crosses over the +DI. Traders should execute the trade and define the stop loss once a signal is generated. The stop loss is typically placed at the low of the signal candle for buy signals and at the high of the signal candle for sell signals. The trade remains valid until the stop loss is breached, even if the +DI and -DI reverse their crossover.

By default, the lookback period for ADX is 14 days. It's important to note that the black line on the chart represents the ADX and it should be above 25 when looking for crossovers.
Overall, the ADX is a valuable tool for evaluating trend strength and can provide helpful insights for traders in making informed decisions.