The Biggest Intraday Trading Myths and Realities

NSE:NIFTY   Nifty 50 Index
Let's discuss..

Intraday Traders are losers

Ohkay..let me mend this statement a bit. "The Indisciplined Intrday Traders Are Losers" it seems correct. Not just in trading but in any field of life, if one is not disciplined he will be a loser. Then why such hate for day trading..well !! we live in a free country and everyone has right to speech and expression. But don't get misguided by the false notions. It just needs learning, Time and Practice-- the LTP if you may allow me to call it. One needs time to learn and practice before the latter two make you perfect or good enough. One do not need Lakhs to enter into trading business. A handful of money would work. Its just that with very lesser funds it would take more time to build up the money-base large enough to take trades which can yield fair amount of profits.

Avoid first 15-30min and last 15-30min

Open any chart and you see big moves during above mentioned time only. The basis here should not be -- when to avoid, but when not to avoid. Many a times the chart patterns are formed in the last few candles of the day, in intraday charts. Due to time constraint and overnight uncertainties, the traders do not want to take risk and leave it for the next day. So the first few minutes provide an opportunity window in those cases. Of course we would not trade any random pick in the morning..right?? But if it is well researched..just do it.

Always place stoploss orders

Rather I would say, "NEVER PLACE HARD STOPS". This helps in avoiding those one to two flash trades which take the stops, especially when the stop is too tight. Its not that some one is watching your stop order to be placed and he will sell off just to have 'your' shares. Its because the stop might be too small to handle stock volatility . Its better to watch the chart instead and concentrate on candle closings for deciding stops in 'mind'. Hope we can do that much as our hard earned money is involved..right?? If a trade seems too risky..just reduce the quantity. If you feel very uncomfortable without stop orders in place, have stock's daily range in mind.

Volatility kills

Will you buy a stock which does not move at all? I hope you would say NO, unless you want to practice how to place buy, sell and stop orders. Volatility is traders' friend. The stock should move in either direction in sufficient magnitude to make potential buy or sell trades in it. Unless the stock can't rush Adrenaline in your brain, its not volatile. I suggest drink plenty of water and do stress relieving Yoga to trade intraday volatility :D

Avoid less liquid stocks

Once the trader has a grip over reading charts and tape, he can take up less liquid stocks. I don't say trade any Tom, Dick and Harry category of stock; but traders' favourite. Normally highly volatile stocks are traders favourite and there are many less liquid stock which are highly volatile. Just keep in mind to trade with LIMIT orders and not MARKET orders in these stocks. Reason being the Bid-Ask spread is sometimes too wide in these stock so inorder to avoid loss trade these stocks at your KEY price.

Do not Reenter after loss..its revenge trading

The stopped out situation is bad for a trader and inability to enter a good setup in same stock due to fear is the worst. The only psychological condition to avoid is the revenge attitude..that's right. If one can take every trade as a fresh trade forgetting losses made in the past, without fear, then one may not miss many good setups. Many a times the worst looking trade may come out to be the best trade of the day.

Do hit like and share your thoughts in the comment section.
Trade safe, be healthy

Comment: The 6 statements written on chart screen r myths but reality is different.
Comment: I am linking some of my intraday trades with this post.

Comment: List of First 21 stocks in the decreasing order of their daily volatility:

Symbol Day volatilty in %age
DLF 2.95
SUNTV 2.57
GAIL 2.19
PFC 2.18
IDEA 2.16
BPCL 1.98


You're amazing! I really like what you said. Thanks :)
Bravetotrade angelrishi
@angelrishi, welcome.
Always great to read your stuff !!
Oh and 1st point, sour grapes bhai sour grapes for the rest of them :D
Bravetotrade mackanshunegi
@mackanshunegi, thanks :)
what does list of 21 is telling?
Bravetotrade AkshathBharathi
@AkshathBharathi, Forget the numbers..the list tells the highly volatile stocks in the descending order.
+1 Reply
AkshathBharathi Bravetotrade
@Bravetotrade, How you calculate the volatility of a particular stock is there any formulaes or you just use the screener to see the volatile stocks?
Bravetotrade AkshathBharathi
@AkshathBharathi, There is a "Daily Volatility Report" on NSE website which is updated every evening. If you follow this report daily, you will notice that some stocks are common everyday.

I filter this report through a formula and then sort.
+1 Reply
angelrishi Bravetotrade
@Bravetotrade, I find the volatility via NSE and filter NIFTY 100 stocks. I usually chose the stocks in the range of 2% to 2.5% as high volatile stocks would require me to place stoplosses far away.
Please share your views that with small margin, which range of % volatility is good?
And, how do we calculate liquidity of them? I assume that if we choose more liquid stocks then the best way to buy is SLM orders and not LIMIT orders, which will ensure that out stock buy price gets executed at the SLM price or 5 to 10 paise above.

Please share your views. Thanks.
Bravetotrade angelrishi
@angelrishi, thanks for the comment. Volatility above 2% is fine. Large SL problem can be solved with position sizing, that's part of trade management.
For liquidity, one can go for Nifty stocks which have enough liquidity.
So if one can sort volatility on Nifty stocks, then proper position sizing can help in trading stocks above 2%volatility.
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