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Short-Term Trading & Intraday - How Can I Generate Regular Income?

Posted on 2019-07-02 in KNOWLEDGE PORTAL



If you want to achieve financial freedom, investing in the stock market is the key. Depending on your goals, you can take short-term, medium-term, or long-term stock investment. In case, you want to make some quick money, then short-term and intraday trading are the best options since you can earn in seconds, and minutes based on your expertise. However, before you test the waters, it's good to learn short-term trading by taking stock market classes. If your aim is to earn daily, then learn intraday trading.

Let's see how you can generate regular income through short-term and intraday trading.

How to generate regular income through short-term trading?

Short-term trading can give you good profits, provided you have mastered its technicals. These technicals will be the key for short-term trading. For this, watch out for the moving averages of the stocks for a specific period of time. Analyzing moving average of stocks for not less than 50-day is the right strategy. Generally, the idea is to buy stocks of those companies that fall in 'A' category. Such companies are those that haven't had any negative news in the recent past and their future looks bright. Pay attention to the market trend as well. Trading in the direction of the trend is most important.

Exit Strategy

Now that you're holding the most-gained stock of the trending sector, be prepared with an exit strategy. Make use of reward to risk ratio to identify the right time to trade. We should understand a minimum reward to risk ratio of 2:1 is necessary to stay profitable in trading. By this, we mean to be ready to quit or release the stock at the right moment. The key to exit is when the trend reversal takes place or when the stock is under-performing the benchmark index. By having a robust exit strategy, you can minimize loss and maximize gain. We should always try to minimise risks by following stop loss and maximise profits by trailing our stop losses.

 How to generate regular income through intraday trading?

Losing and earning money in the stock market is not uncommon. So learn intraday trading and master the skills to make money. If done right, you can get a decent return for your money. But given the risk involved, you may also lose a big chunk of your earnings within no seconds

Follow these tips to generate regular income with intraday trading

Stock selection

Choosing stocks wisely is important. To safest bet would be to pick liquid shares. These stocks have a high trading volume, and investors can buy and sell them when they choose to. Most of the time, the price of such stocks remains unaffected. For a better stock selection strategy, learn intraday.

Don't trade on advice and suggestions

New-based trading is very risky, and you'll lose money 8 out of 10 times if you believe the analysis of the so-called stock market experts. Rather, go for technical analysis. This means, have a clear entry/exit and stop loss strategy. Perform risk management and always be ready with a backup plan. You should be able to do your analysis yourself because we aren't always sure the person giving us the advice is doing it in the best of our interests.

Fix a loss limit

Since losing and winning are integral to intraday trading, you may probably suffer a bad day some time. To avoid incurring a heavy loss on such a day, fix a loss limit. Set a percentage you're okay to lose per day. Try to have a balance between profit and loss ratio by fixing your loss limit to 1 percent per day. Don't take any unwanted risks by putting the entire money earned from trading. Trade with only that much money that suits your pocket so that you can easily bear the loss, just in case.

Both these practices followed in the stock market are lucrative, but risky. One wrong decision can make you bankrupt, and one good decision can change your fortune. There are several methodologies and tools to make money in the stock market. But you need to master them all. When you learn short-term trading and intraday, you'll be able to control risk and generate regular income.

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