Best intraday trading strategies for Aussies

Highlights

• Intraday or day trading is one of the most popular trading in Australia.
• Intraday trading involves selling or purchasing of financial instruments in a single trading day.
• The day traders trade in multiple assets within the same day.

Intraday trading, also known as – Day trading, requires time, dedication, and a specific mindset. It involves fast decision making while executing large number of trades for comparatively maximum profit each time, hence, it is often considered risky.

That’s why, analysts advice to follow some good strategies before getting started with day trading.

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Day trading is often associated with those markets that have fixed closes, though, the traders can trade in the 24*7 open markets. Hence, choosing a trading security becomes an important factor. Here are some popular day trading securities and assets –

• Cryptocurrencies
• Indices
• Forex
• Shares

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Top intraday trading strategies

Day trading is often looked at as a lucrative deal, but it may result in losses without the right strategies. There are several strategies for day trading. However, traders should invest according to their financial situation.

Here are some intraday trading tips for investors –

Momentum trading

Experts suggest this technique requires right direction at the right momentum. Traders pick right stock before any significant market trend and invest accordingly. Hence, choosing scrips is based on news reports on market performance and players info. Therefore, an intraday investor should study new trading news accordingly.

Also, momentum trading strategy requires speedy investments based on stock news and holding is based on market analysis. Hence, traders should follow this rule closely before taking any decision.

Breakout Trading Strategy

Timing is an essential factor in intraday trading, especially in a breakout trading strategy. Breakout trading involves identifying threshold points when the stock price falls or rise above the specified time.

If the prices continue to surge beyond the threshold point, traders can consider long position, buy the scrip, and sell the stock when the price falls below the threshold.  The basic thought process behind this strategy is that stocks will be more volatile in the market if the prices cross the threshold points.

Scalping

It’s a short-term trading strategy that makes frequent but small profits yet targets a high win rate. The theory behind scalping strategy is – traders can easily build a big trading account by taking smaller profits over the time.

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Most scalpers close position before the end of the day, as they can lose smaller profit margins by overnight funding charges.

Analysing Money flows

Money flow indicator signals whether an asset might be oversold – using volume and price. It compares the number of trades from previous day to the present day to determine whether it is negative or positive.

A reading of 80 or above indicates overbought condition, indicating selling. Whereas reading of 20 or below indicates oversold market condition which is a signal to buy.

Other important points before getting started

But before starting the investment, traders should also consider the following points

1. Deciding how to day trade

This is the first step before becoming a day trader. The investors should always pre decide their investment products. 

2. Understanding the factors impacting day trading –

There are some important factors that traders should consider before trading which includes -

Market Liquidity – which is how fast and easily positions can be entered and exited. Intraday trading demands high liquidity for executing multiple trades.

Asset volatility – Asset volatility is also a major factor impacting the day trade. High asset volatility creates lot of short-term opportunities.

Trading volume – Trading volume of an asset is a measure of the number of times it is being sold or bought in each period. High trading volume indicates lot of interests and helps to identify entry and exit points.

3. Planning the day trading

Before starting day trading, traders should outline their plan for the day where the expectations should be realistic and achievable. Thus, creating methodology is important based on either fundamental or technical analysis.

Best intraday trading strategies for Aussies

Bottomline

While intraday trading is attractive for many investors, it is always important to monitor first position and learn risk management. Although there are many safe options, creating a risk management strategy is a crucial step in day trading.