Day Trading Techniques: Tips to Analyse the Intraday Market

In this article, we will discuss

Owing to high volatility, day trading carries a lot more risk than your regular trading strategies. For this trading style, you don’t only need to be quick with decision-making but also be very agile with analysing the market. Due to the ever-changing market scenarios, you can’t take months to make your analysis. You might probably just get a few short minutes to identify a trend and take quick action. As unfortunate as it may sound, it is exactly in the market analysis process where most investors fail to hit the mark. To help you with your analysis process, here are a few tips that you can use to make better decisions in the market.

1. Look for Liquid Stocks

If you understand the true meaning of day trading, you understand that you need to close all your open positions on the same day before the markets close. Hence, the first tip when you analyse the market and make your pick for stocks is to choose liquid stocks. Liquid stocks are traded in high volume and are easy to buy and sell. In terms of liquidity, large-cap stocks are much easier to sell over small or mid-cap stocks that might not always be in demand. This would not only help you close your position before the market ends, but you would also be able to take advantage of any significant momentum in the price of such stocks.

2. Go with the Flow

The market always follows a certain trend or wave. As an investor, you need to ride those waves to make the most out of the given situation. Hence, instead of trying to go against the trend, strategise your next move that goes with it. Since you are day trading, you must also remember that intraday trends don’t last for a long period. Their maximum duration is two or probably three trade cycles before they take a U-turn. Hence, when a trend shifts its direction, you must change your strategy accordingly. Analyse the markets to find long positions during an uptrend and short positions during a downtrend.

3. Choose Your Entry and Exit Points in Advance

With the shifting market trend, it is common for traders to start doubting their strategy once they have opened a position in the market. This is general investor psychology, and you are not alone in this. However, to make sure you don’t fall prey to it, decide your entry point and exit points in advance when you analyse the intraday market. As soon as you book your targeted profit, exit! Do not wait for the market to give you better returns than your target because this sudden greed can reverse all your profits, and you can even lose your capital in the end.

4. Decide on a Stop Loss

Stop loss is a price trigger which automatically sells your shares once the stock price goes below a set price limit. For example, let’s say you have a stock trading at ₹140, and you have set a stop-loss at ₹100. As soon as the price of the stock reaches ₹100, the brokerage platform will sell it off on your behalf to avoid further losses. Setting a stop loss helps you minimise the impact of losses in a trade. So it is very important that you figure out a suitable stop loss price when you analyse the market. It will help you determine how much losses you can suffer without affecting your financial goals. Additionally, it will help you in case of a downtrend if you can’t monitor the market for some reason.

5. Learn Technical Analysis

Technical market analysis is a very important analysis skill for day trading. It involves reading chart patterns, making calculations, identifying trends and a lot more. Analysing the market is broadly classified into technical analysis and fundamental analysis. Technical analysis focuses more on the volatility and price fluctuations of the market. Fundamental analysis is researching the fundamentals of the company, including its directors, product or service, its position in the industry and more. While primary fundamental analysis is also important, day traders rely more on technical analysis to comprehend the trends and volatility associated with a stock.

6. Conduct thorough Research

A crucial part of market analysis is to conduct in-depth research of the stocks you want to trade in before you zoom in on any one stock. This is a part of fundamental analysis, where you try to find out more about the company. Such details include any and every recent update from the company, its management, and anything in the news. Although technical analysis of the stock will help you understand the price patterns, fundamental analysis can help you make informed decisions in a fast-paced market scenario because you understand the foundation of the company. It will also help you choose one stock over the other because fundamental analysis tells you about the investor’s sentiment towards a particular stock.

7. Learn to Read Charts

This is one of the most important tips for everyone participating in the intraday market. Knowing how to read price chart patterns will not only help you identify profitable opportunities, but it will also help you analyse the right time to enter and exit the market. By reading chart patterns, you can make quick comparisons and research in a shorter time frame. There are various chart patterns that cover the activities of a stock in different time frames. Some examples include hourly charts, 2-minute charts, 5- minute charts, 15-minute charts, and weekly, monthly or even annual charts. Most day traders, however, prefer the minute charts as they reveal the price fluctuations of stock in a short time frame, which is more relevant to their trading style.

8. Diversify Your Portfolio

Intraday trading anyway carries a high level of risk, and concentrating all your capital on one stock just amplifies that risk. Hence, experts always suggest traders to keep their portfolios diversified. This is a universal tip that is relevant not just for day traders but every investor in the market. A diversified portfolio helps you spread your risk to different segments, thus also acting as a hedge against losses. Therefore, even when you analyse the market, try to analyse different stocks from different segments to minimise your risk in actual trade.

9. Choose the Right Trading Platform

Lastly, before you start analysing the market, make sure you first choose the right trading platform. Analyse your options to pick a platform that suits the needs of an intraday trader. Regular investing is different from intraday trading, and so are the needs of an intraday trader. It requires frequent buying and selling of trades, reading the market, analysing the charts and a lot more. In such cases, it is important for you to have a robust trading app that is as agile as your trading behaviour. Samco’s New-Gen trading app is built with cutting-edge technology and designed to meet the needs of every intraday trader. This fast-paced app not only helps you analyse the market but also your own trading activity. It comes with in-built charts, trade books and various other features that help you Ace the Index. Open your demat account on the New-Gen Samco Trading App today.


If you are a new trader, you might make a profit at the beginning with a fluke, but it won’t take you beyond one or two trades. To see lasting results, you don’t just need to analyse the market; you must also know how to analyse it the correct way. By knowing the right way to market analysis, you can formulate your trading strategies and meet your financial goals.

Frequently Asked Questions

Q1. What are the basics of technical market analysis?

Ans. The four basics of technical market analysis include trend analysis, chart patterns, technical indicators and identifying the support and resistance levels.

Q2. What are the important ratios for market analysis?

Ans. PE Ratio, PB Ratio, Debt-to-equity ratio, and Earnings per share are a few of the most important ratios that you must use to analyse the market for day trading.

Q3. What is an uptrend in the stock market?

Ans. An uptrend is a price movement when the overall price of the stock is moving upwards. It might come down while fluctuating, but if you look at the price chart, the overall graph would be on a rising curve.

Q4. What is the quantitative and qualitative analysis of the stock?

Ans. Quantitative analysis is the financial analysis that takes into consideration the mathematical and statistical aspects of a stock. Qualitative analysis, on the other hand, means analysing unquantifiable parameters such as goodwill, consumer behaviour, etc., for the company.

Q5. What are the three different types of price charts for day trading?

Ans. Bar charts, candlestick charts and line charts are the three price charts that traders mostly use for day trading.

Disclaimer: INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. The asset classes and securities quoted in the film are exemplary and are not recommendatory. SAMCO Securities Limited (Formerly known as Samruddhi Stock Brokers Limited): BSE: 935 | NSE: 12135 | MSEI- 31600 | SEBI Reg. No.: INZ000002535 | AMFI Reg. No. 120121 | Depository Participant: CDSL: IN-DP-CDSL-443-2008 CIN No.: U67120MH2004PLC146183 | SAMCO Commodities Limited (Formerly known as Samruddhi Tradecom India Limited) | MCX- 55190 | SEBI Reg. No.: INZ000013932 Registered Address: Samco Securities Limited, 1004 - A, 10th Floor, Naman Midtown - A Wing, Senapati Bapat Marg, Prabhadevi, Mumbai - 400 013, Maharashtra, India. For any complaints Email - Research Analysts -SEBI Reg.No.-INHO0O0005847

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