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Tag: Intraday Trading

  • Swing Trading Vs Intraday Trading – Which One Should You Choose?

    Let’s start by understanding the different ways of trading. The main differences between the two ways of trading are investment, commitment, and time. Traders choose different trading strategies based on time, money, and psychological factors.

    Intraday Trading

    The Financial Regulatory Authority (FINRA) says that day traders are people who do many “round trips,” at least four of which happen every five days. Day trading might be the most common way to trade. Most traders are day traders, which means they make money from the price changes on the market during the day. All-day trading takes place in a single day, as the name suggests. Traders open a number of positions during trading hours, which they all close before the end of the day.

    Day traders use technical analysis and tools to get real-time updates. They often trade full-time and keep a close eye on the market for business opportunities. At least in terms of percentages, day trading gives people with small trading accounts more chances to make money. They don’t try to make a lot of money from one trade. Instead, they should do a number of transactions to make enough money.

    In the end, day trading is a type of high-frequency trading that involves small amounts and always buys stocks for less than what they sell for.

    Swing Trading

    The main difference between day trading and swing trading is the length of time. During a swing trade, days or weeks can go by. Swing traders don’t make a trade until they see a pattern. They don’t trade full-time, but they use both fundamental and technical research to spot trends as they happen and trade in line with them. They would look for stocks that could make them the most money quickly. There is more risk, but there is also more chance of making money.

    Differences between day trading and swing trading that are important to know

    Swing trading and day trading are both types of trading, but they are not the same. Here are some of the most important differences between the two ways of trading.

    • Day traders buy and sell a lot of different stocks in the same day. Swing traders buy and sell a number of stocks over a longer time period (usually between two days to several weeks). So that they have a better chance of making money, they look for a pattern of trends.

    • Day traders will close out all of their positions before the closing bell rings. Swing traders would hold their position for at least one night before settling it the next day.

    • Swing traders only work for a few hours each day. They don’t spend the whole day tied to their computers. Day trading takes a lot of time and commitment.

    • Day traders make a lot of trades every day, which increases their odds of making money. Gains and losses, on the other hand, are smaller. Swing trading has fewer wins and losses, but they are often bigger.

    • Day traders need the newest hardware and software. Day traders must have extremely rapid trigger fingers. You don’t need complicated or cutting-edge software to do swing trading.

    A trader’s main goal is to make as much money as possible. So, between swing trading and day trading, which is better?

    Even though both ways of trading have many pros, you should be aware of their cons before choosing one. The list that follows goes over the pros and cons of each one.

    • Swing trading needs less attention because it takes place over a longer period of time. Day trading, on the other hand, requires regular market watching and quick decisions.

    • Day traders try to make as many trades as possible to make the most money in a single day, while swing traders try to make a big profit.

    • Swing traders take on more risk when they leave their position open overnight. On the other hand, day traders close their trades at the end of the day. So, there is no longer any risk.

    • Swing traders wait until a deal has been going on for a while before using that time to watch how the market moves. It helps make things safer. Day trading is easier for most traders to do because it needs less capital than swing trading. Day traders have to make trades quickly because one loss could wipe out their whole day’s profit.

  • Ideal Timeframe For Intraday Trading

    Intraday trading often proves that taking fewer trades gives you better profits. Instead of buying and selling stocks the whole trading day, it might be smart to do intraday trading only during a few key hours. In fact, traders who work with stocks, index futures, and ETFs have found that it’s better to spend one to two carefully chosen hours a day on trading.

    The ideal time-frame for intraday trading

    Long-term intraday traders will do well to find the best time frame. Using these hours can help you get the most done because they are when important things happen on the market. On the other hand, people who trade all day have little time for other things and don’t make enough money. Even intraday traders who have been doing it for a long time can lose money if they trade outside of the best time frame for intraday trading. This raises the question: what is the best time frame for intraday trading? Most say that it is between 9:30 and 10:30 in the morning.

    Should you buy or sell within the first 15 minutes?

    Intraday trading is best done in the first one to two hours that the stock market is open. But in India, most stock market trading channels don’t open until 9:15 a.m. Why not start at 9:15 instead? If you have been trading for a long time, trading in the first 15 minutes might not be as risky. For people who are just starting out, it’s best to wait until 9:30. This is because, in the first few minutes after the market opens, stocks are probably reacting to the news from the night before.

    A trade will often show sharp price movements in one direction. This is nicknamed the “dumb money phenomenon” because people rely on old news. Traders with a lot of experience may make some good deals in the first 15 minutes. They are mostly mean reversal traders. Beginners who have never heard of “dumb money” or the strategy that experienced traders use to fight against it will think the market is very volatile. So, it’s better to wait until 9:30 than to jump in at 9:15.

    Trading at the open

    Not all moves are bad. After these first extreme trades, the market will have the right amount of volatility for beginners. Since this is the case, the best time to trade is between 9:30 am and 10:30 am. There are many benefits to intraday trading in the first few hours after the market opens:

    The first hour of the day is usually the most volatile, giving you plenty of chances to make the best trades of the day. The market is liquid enough to get in and out of during the first hour. Since there is more volume, liquid stocks are likely to be sold off faster.
    – It has been shown that the stocks bought or sold in the first hour make some of the biggest moves of the whole trading day. If you do it right, it can give you the best returns of any time during the trading day. But you should also prepare for large losses in the first hour due to volatility.
    – After 11 a.m., trades usually take longer and involve fewer people, which is bad for intraday traders who need to finish their deals by 3:30 p.m. If you need more time, it would be a good idea to keep this session going until 11 a.m. But day trading is a better fit for the strategy of only trading in the first hour.

    Think about the bigger picture.
    The range of 9:30 to 10:30 is not a rule that every trader must follow. It’s good for beginners in general, but you can change it to fit your needs. It’s smart to think about the bigger picture.

    For example, one strategy for intraday trading is to keep the day of the week in mind along with the best time frame. Monday afternoon is often a good time to buy on the market because prices tend to go down at the beginning of the trading week. Experts say that you should sell on Fridays, right before the drop on Monday.

    Also, not every trader needs to do something during that first hour. People who usually make more than one trade in a day can choose a shorter time frame. Intraday traders who only make a few trades each day can choose a longer time frame instead. Traders with a lot of experience may also change their time frame on different days, depending on how busy they are.

  • Ways To Determine The Ideal Stop Loss

    When it comes to trading, no one wants to lose money. That is why it is critical to establish a floor of security for your position. Stop-loss orders are used in this situation. Many investors, however, struggle to determine where to place their stop-loss levels. If your stop-loss orders are placed far away from your entry price, you can lose a lot of money. However, you can get out of a position too rapidly if you set your stop-losses too close together.

    So, how do you know where your stop-loss order should be placed?

    When you start trading, it is important to have one of the best trading accounts from the best share broker in terms of the number of indicators you can use. Our online trading platform that gives you the widest range of leading as well as lagging indicators for you to choose from. With us, you can execute any complex strategy with any number of indicators.


    What Is a Stop-Loss Order and How Does It Work?

    A stop-loss order instructs a broker to sell stocks at a certain price if they reach it. These orders aid in minimizing an investor’s loss in a security position. As an example, if you set your stop-loss order at 10% below the price at which you bought the security, your loss will be limited to 10%.

    If you buy Company X stock for Rs 100 per share, for example, you can place a stop-loss order for Rs 90. This will limit your losses to 10%. Your shares will be sold at the present price if Company X’s stock falls below Rs 90.

    Choosing a Stop-Loss Order
    Targeting a permitted risk level is the key to determining where to place a stop-loss order. This price should be calculated wisely to minimize loss.

    There are numerous theories about where to place a stop-loss order. Technical traders are continuously looking for new ways to time the market, and different types of stop or limit orders have diverse applications based on the timing strategies used. Some theories employ universal stops, such as a 6% trailing stop on all stocks, while others employ security- or pattern-specific stops, such as average true range percentage stops.

    Methods of Stop-Loss placements


    The above-mentioned percentage technique is one of the most common. There’s also the support strategy, which involves placing hard stops at a certain price. This strategy may be a little more difficult to master. You’ll need to determine the stock’s most recent support level. You can put your stop-loss order slightly below that level once you’ve figured that out.

    The moving average method is the other option. Stop-losses are placed just below the moving average price when using this method.

    Swing traders frequently use the multiple-day high/low strategy, in which stops are set at the lowest price of a given trading day. Lows, for example, may be replaced at the two-day low. Indicator stops based on larger trend analysis may be used by more patient traders. Other technical indicators, like the relative strength index, are frequently used in conjunction with indicator stops.

    What to Think About When Using Stop-Loss Orders

    When it comes to stop-loss orders, there are a few things to keep in mind as an investor:

    Stop-loss orders are not for active traders who monitor every move of the price.
    Stop-loss orders aren’t ideal for huge blocks of stock because you risk losing more money in the long run.
    Also, never assume that your stop-loss order has been executed. Always wait for a confirmation of your order.

    Final Thoughts

    To select stop-loss placements, traders should assess their personal risk tolerances. To determine whether retracements are common, specific markets or securities should be investigated. Retracement-prone securities require a more active stop-loss and re-entry approach. Stop-losses are a type of profit-capture and risk-management strategy, but they do not ensure profitability.

    Creating a trading strategy is an art. You need the best trading accounts from the best share broker to give you access to all types of leading and lagging indicators. This is exactly what we offer at Zebu. We have created a highly advanced online trading platform that helps you take the best possible trades. To know more about Zebull Smart Trader, please get in touch with us now.

  • The Detailed Guide To Trading With VWAP

    Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

    The volume-weighted average price (VWAP) is a trading benchmark that shows the average price a security has traded at over the course of a day, depending on both volume and price. VWAP gives you the average pricing of a stock by accounting for one of the most important parameters – volume. How to Work Out the Average Volume-Weighted Price Instead of manually calculating the VWAP, you can simply add it as an indicator to your chart. When it comes to using the right indicators for your trading strategy, you need an online trading platform from one of the fastest-growing stock broker companies in India. Our goal is to give you the best online stock trading experience with every possible indicator that you might need to create your strategy. Getting back to calculating the VWAP – you can follow these steps to compute the VWAP on your own. Assume a 5-minute chart; regardless of the intraday time frame, the formula is the same. Find the stock’s average price for the first five minutes of the trading day. Now, multiply the high, low, and close of a candlestick by three. Multiply by the volume of that time period. In a spreadsheet, enter the result in the price column. Divide this value from the volume for that time period. This will give you the VWAP. Continue to add the price value from each period to the previous values to maintain the VWAP value throughout the day. Subtract this amount from the total volume up to that point. Create columns for cumulative price value and cumulative volume in a spreadsheet to make this easier. What Does VWAP Have to Say to You? The VWAP ratio is used by large institutional purchasers and mutual funds to help them move into and out of companies with as little market impact as feasible. As a result, institutions will try to buy below the VWAP or sell above it whenever possible. As a result of their efforts, the price is pushed back toward the average rather than away from it. VWAP can also be thought of as a trend confirmation tool and you can build a trading strategy around it. They may prefer to open long bets when the price is above VWAP, for example. They may opt to start short positions when the price is below VWAP. Difference Between MA and a VWAP? VWAP and a moving average may appear similar on a chart. The calculations for these two indicators are different. VWAP is calculated by dividing the entire volume by the sum of price multiplied by volume. A simple moving average is calculated by adding closing prices over a set number of periods (say 10) and dividing by the number of periods (10). There is no consideration for volume. The Volume-Weighted Average Price’s Limitations VWAP is a one-day indicator that is reset at the start of each trading day. When attempting to calculate an average VWAP over several days, the average may become distorted from the genuine VWAP reading, as explained above. When institutional buyers decide to buy or sell a stock, the VWAP is an important consideration for them. In strong uptrends, the price may continue to rise for several days without ever or only sometimes falling below the VWAP. Waiting for the price to fall below VWAP may therefore be a missed chance if prices are rapidly rising. VWAP is based on historical data and does not have any inherent prediction or calculation capabilities. Because VWAP is tied to the day’s opening price range, the indicator’s lag grows as the day progresses. This may be observed in how, after 330 minutes (the length of a normal trading session), a 1-minute period VWAP calculation can typically resemble a 390-minute moving average at the end of the trading day. Why Does The VWAP Matter? Traders who want to get a smoothed-out indication of a security’s price over time utilise the VWAP. Larger traders that need to make sure their trades don’t alter the price of the security they’re seeking to purchase or sell use it as well. To prevent artificially inflating the price of an asset, a hedge fund might refrain from placing a buy order for a price higher than the security’s VWAP. Similarly, it should avoid placing orders that are too low in comparison to the VWAP, so that the price is not driven down by the sale. When used right, VWAP can take your best online stock trading experience and enhance it. With the right online trading platform like Zebull Smart Trader that comes with VWAP and so many other in-built indicators, you can ensure that your strategy is designed to make the most profits. As one of the fastest-growing stock broker companies in the country, we are dedicated to providing you with the best tools for the best trades. Please get in touch with us to know more about our products and services.