Intraday Trading Strategies

Intraday trading involves closing all trades before the trading session ends and the market closes, regardless of whether they were opened at the beginning of the session or in the last hour. Trades can be rolled over to the next day, but only in case of a strong trend. This strategy minimizes swap costs, allows for quick profit and loss assessment, puts moderate pressure on the nervous system, and offers confirmation signals on the M30 to H1 time frames.

This overview provides examples of intraday strategies that can be used to develop trading systems. These basics of intraday trading can also serve as a foundation for developing long-term strategies. Moreover, the article provides tips for intraday trading so that beginners can start trading with confidence.

The article covers the following subjects:

Major Takeaways

• Intraday trading involves trades executed within one day or within a trading session without swap fees.
• Intraday trading works for all asset types but requires high liquidity and volatility to be effective.
• Time frames: M30–H1.
• Strategy types include news-based trading, opening trades on breakouts and level retests, trading on rebounds from key levels or channel boundaries, trading based on anticipated trend reversals, and scalping.
• The main tools are trend indicators (moving averages, Alligator, Momentum), oscillators (the RSI, MACD, CCI, ADX), reversal patterns (a Pin Bar, a Head and Shoulders, a Double Top/Bottom), Resistance/support levels and trend lines, and volume indicators.
• Additional tools include volatility calculators, asset correlation calculators, economic calendars, and stock screeners.
• Intraday trading principles revolve around identifying a preliminary signal, recognizing the main signal, and spotting a confirming signal using indicators.

Intraday Trading Strategies

The best intraday trading strategies can be divided into two categories:

• Trading based on fundamental analysis – news, the economic calendar, screeners, etc.
• Trading based on technical and chart analysis.

Technical analysis trading involves several options:

• Trend trading: searching for a new trend or trend reversals. Getting confirmation from oscillators.
• Trading on level breakouts or reversals. Channel trading strategies.
• Scalping.

Trading Based on Fundamental Analysis

News-based trading, or a momentum trading strategy, involves initiating a trade immediately after the news release to profit from short-term price movements. The strategy implies opening positions during early trading hours or when the volume is high.

Examples of news you can capitalize on:

• Macroeconomic statistics. The US Fed’s interest rate change, the Non-Farm Payrolls (NFP) employment report, and similar indicators in other countries can significantly impact currency pair rates. These news releases influence currency values and can ripple the share market.
• Stock market: publication of financial reports, announcements of unique projects, etc. It is crucial to keep a close eye on blue chips and small-cap technology companies.
• Key cryptocurrency market news: regulatory changes, legislation, a major investor entering the market, etc. Examples include the launch of spot ETFs for BTC in January 2024 and the entry of BlackRock and MicroStrategy into the market.
• Force majeure events such as geopolitics, natural disasters, etc. For example, the surge of BTC to 100K at the end of 2024 was fuelled by the results of the US elections.

An example of a popular trading strategy is trading the Tesla stock (TSLA).

• On October 24, 2024, Elon Musk announced that car sales were projected to grow by 20%–30% in 2025. The financial results have exceeded expectations, leading to a notable 19% jump in the company’s share price.
• On November 6, Donald Trump secured victory in the US presidential election. As Musk supported him, the company’s share price not only rose by 13%–15% within the same day but also continued to increase after that.

The timing of market entry is crucial. News often influences prices during pre- and post-market trading, leading to a gap when the price opens higher or lower than the previous day. Intraday traders look for such stocks and speculate on them, believing the gaps will close by the end of the day. This approach is called the Gap and Go trading strategy. Nevertheless, it means that experienced traders should invest early, which carries higher risks. If you enter too late, you may miss out on significant profits once the session begins. However, in the case of Trump’s victory, the uptrend persisted long enough to provide additional profit opportunities.

Quotes can react differently to media publications. For instance, the NFP report might influence prices for just a few hours, while cryptocurrency news can cause lasting price increases.

Trading on the news has several pitfalls:

• The news may affect the price in advance. Intraday traders may realize that the Fed will cut the interest rate by 0.25 basis points by analyzing macro statistics. Thus, when the news is finally announced, the US dollar rate will remain unchanged, as traders have already reacted. Therefore, the perfect strategy is to respond swiftly to unexpected news by monitoring key media sources regularly.
• News misinterpretation. A quarterly 5% gain in net revenue does not mean that the stock price will skyrocket since traders could expect a 10% increase. Therefore, it is crucial to compare facts with forecasts.

Not sure how to interpret the news correctly? Set pending orders on both sides of the price 5, 10, or 30 minutes before the news release, if possible. Place a buy stop for a long trade and a sell stop for a short position. You may skip a third or half of the impulse movement, but it will reduce the risks associated with intraday trading. However, there is always a chance of your stop-loss order being triggered prematurely in either direction due to market volatility.

Breakout Trading Strategy

A strong support or resistance level often signifies a concentration of pending orders. A trader may spot resistance and set a take-profit order there for a long position, anticipating a potential price reversal due to limited confidence in further upward movement. Consider BTC as an example: the 100,000 level acted as a strong psychological resistance level. As soon as the price broke through 100,000, traders started to close long positions, and sell-off began, causing the price to reverse downward.

Afterward, false breakouts and failed attempts to consolidate above the 100,000 mark occurred. This example shows that trading solely on the key levels breakout is not effective, due to false signals.

Breakout trading strategies with confirmation signals:

• Breakout from a sideways channel. A flat or sideways movement often signals market consolidation. When the price breaks out of this range, it typically indicates the start of a new trend. A stronger confirmation comes when the price retests the breakout level—moving back to the horizontal line without re-entering the channel—before continuing in the direction of the breakout.

Breakout trading strategy example.

The NZDUSD pair has formed a sideways channel marked by red horizontal lines in the screenshot. Initially, the price breaks through the flat channel’s upper boundary (1). However, the breakout turns out to be false, as the quotes fall back within the channel (2). Subsequently, the price attempts to break through the resistance (3) again but reverses at almost the same mark, indicated by the blue line. Instead of retreating to the channel’s boundaries, the asset retests (4) the resistance, which turns into the support level. After the blue line—new resistance—is breached, long trades can be opened at the candlestick (5).

• Trend trading. Assume that the current trend is gradually fading. To effectively navigate this, you should look for a pivot point, which is characterized by the formation of a reversal pattern and the breakout of the trend line. The resistance or support level breakout, depending on a trend, serves as a confirmation.

Example.

Let’s build a trend line on the EURUSD chart showing a downtrend. At point (1), the price breaks through this line but then retreats. A strong signal would be a trend line retest, but the price does not reach it and reverses upward at point (2). Once the resistance is breached at candlestick (3), a long position can be opened. The lower shadow of the candlestick (4) almost touches the broken resistance. This moment should be taken into account when placing a stop order. It should be set slightly below the resistance, which has become the support level, in anticipation of a potential price retracement.

Reversal Trading Strategy

Apart from a reversal trading strategy in combination with a trend line breakout, you can also trade reversal patterns like a Pin Bar, Double Bottom, or Double Top.

An example of a basic intraday reversal trading strategy.

The chart above shows an example of a successfully formed double reversal pattern. When this pattern appears on the chart, it often means that profit is almost guaranteed. This pattern can be found across various time frames, but it tends to perform best on the daily chart, where price movements are more consistent and reliable.

The chart shows two patterns. The first one is a Double Top:

• The price has formed the resistance R within an uptrend with clear corrections. Next, the asset retreats from point 1 and forms the second top.
• The support S1 can be plotted based on the first upward reversal.
• The support S1 breakout means that a Double Top pattern is completed. Thus, it is crucial to wait for the end of the first candlestick to open a trade. Since the second candlestick is bullish, wait for either a retest of the support S1 or a downward reversal.

A short trade can be opened at candlestick 2.

The second pattern is a Head and Shoulders:

• After plummeting, the price reverses and establishes the support S2.
• The pattern forms as the price makes two lower highs (the shoulders, marked by blue lines) and a higher peak in between (the head). The failure to reach the previous S1 level highlights weakening bullish momentum, signaling a potential downtrend continuation.

Once the S2 level is pierced and retested at candlestick 3, a short trade can be opened.

Note: this pattern can also be found on the D1 time frame. Once a signal appears, switch to the H1 time frame and open short positions. In the first instance, there are eight red candlesticks between the S1 and S2 levels and only two green ones. The absence of long upper shadows reduces the likelihood of a stop-loss order being triggered prematurely. In the second instance, four consecutive red candlesticks confirm strong bearish momentum, offering a high probability of intraday profit by opening a short position.

In stock trading, reversal trading can refer to trading against the prevailing trend. For example, a day trader may observe an uptrend approaching the resistance level before the session closes. Convinced that the next session will start with a downward gap, the trader might decide to open a short position during the last few minutes of the current session. This is a high-risk strategy, as unforeseen fundamental factors may emerge, pushing the price to break through the resistance from below.

Scalping

Scalping is a type of intraday trading strategy in which traders buy or sell assets by executing multiple trades over a very short period. These trades are often closed within minutes or even seconds. The goal of a scalper is to capture just a few pips per trade, capitalizing on short-term price fluctuations, regardless of the market trend.

What a scalper does:

• A scalper selects assets with the highest liquidity and smallest spread, as high trading costs can significantly reduce profits, especially in high-frequency intraday trading. They typically favor ECN accounts, which charge a fixed commission for each full lot, while offering spreads that start from 0 pips.
• Seeks assets with high volatility. The quicker and more pronounced the price fluctuations, the more chances there are to make a profit. 
• Looks for the best moments to enter the market. For example, the first and last hours of the trading day show the greatest price swings and trading volumes.
• Tries to automate manual strategies to reduce the psychological burden. To offset time spent and losses, which are inevitable, it is essential to open several dozens of trades per day. Therefore, utilizing a trading robot is the most effective approach.

Although scalpers are not concerned with the presence of a trend, they need signals that guarantee at least a short-term movement in the forecasted direction. Thus, the strategy options include trading on strong level breakouts or rebounds, trading on corrections, and strong impulses after news releases.

Example.

This strategy involves trading within a channel. Trades are opened based on price movements from one channel boundary to another. While it is possible to open trades during a breakout, this approach is not the most effective here. If the price reverses within the channel but does not reach the opposite boundary or, at least, the middle of the channel, a pause should be taken.

Moving Average Crossover Strategy

A Moving Average (MA) is the average price value for the number of candlesticks specified in the settings. Depending on the type of moving average, different candlesticks may carry varying levels of significance. It is difficult to say which moving average gives more accurate signals, as everything depends on the situation.

If the price is above the MA and moving upward, the trend is bullish. If the price is below the MA and decreasing, the trend is bearish. Two or three moving averages with different periods can be used as a filter where the first line reacts instantly to the current price change, and the second slow one shows the overall trend.

Dozens of other intraday trading indicators are based on moving averages, including the Bollinger Bands channel indicator, the MACD oscillator, and the Alligator trend indicator. These tools can be used as primary and confirming indicators.

This strategy is one of the simplest and easiest to understand. Let’s look at an example.

Initial data:

• Currency pair: EURUSD.
• Time frame: H1.
• Indicators: EMA (5) and EMA (21) moving averages, the RSI with basic settings.

The strategy involves the moving average crossover. If the fast EMA (5) crosses above the slow EMA (21), it signals a potential uptrend. If the next candlestick closes above this crossover point and shows an upward direction, it acts as a strong reinforcing signal. Additionally, if the RSI crosses the midpoint of 50 and approaches the overbought zone, it is a confirmation signal. The conditions for entering a short position mirror those for going long.

The transaction is closed at a trader’s discretion. For instance, it may be exited when an oscillator enters the overbought zone and starts to reverse downward. Besides, you can close 50% of the position once you secure a profit of 15–20 pips and then set a 10-pip trailing stop order. Another option is to close a trade when the fast EMA (5) begins to move downward.

In points 1, 3, and 4, the signals have proved to be accurate. The fast blue EMA crosses the slow one; the price is trading higher/lower; the oscillator is above/below the 50 level. However, signals 1 and 4 could only bring about 30-35 pips.

There is no signal in point 2, as the chart shows not the crossing but the divergence of moving averages.

The strategy requires some refinement due to the presence of false signals. Try to adjust the EMA parameters in the tester to match the volatility of each asset. Additionally, consider plotting levels to verify signals and pay attention to patterns.

Broadening Channel Trading Strategy

The average range of price movement is estimated on the price chart. As soon as the channel starts to broaden, and it is confirmed by fundamental factors or technical tools, a trade is opened in the direction of the trend. Stop-loss orders can be set at the opposite boundary of the channel.

There are also other trading strategies based on channels. For instance, if a candlestick breaks through a channel boundary, it could signal the start of a new trend. This approach is particularly effective with less flexible channels, such as Keltner Channels, where breakout patterns tend to be more reliable.

Additionally, there is a strategy that revolves around the price returning to its average value. The wider the channel expands, the greater the likelihood that the price will make a strong move back toward the average line. For example, the chart above shows that after two long red candlesticks, a series of small-bodied candlesticks appears, with the price retracing back to the channel, providing a sign of reversal. A long position can be opened and closed when the price touches the moving average.

Continuation Patterns Trading

When you spot a trend on a chart but have missed its beginning, should you jump in and enter the market or wait for a new trend? This strategy advocates finding a balanced approach by entering the Forex market after the emergence of trend continuation patterns, such as a Bull/Bear Flag or a Pennant.

Both patterns typically emerge during a sideways trend or a correction. This occurrence can be explained by a temporary equilibrium in the market, because of which the trend is paused. For example, a consolidation may occur before the release of news. The main distinction between a Flag and a Pennant lies in their shapes, yet the interpretation remains the same. If the price breaks through a pattern boundaries in the direction of the previous movement, the trend resumes.

Example.

A series of falling candlesticks is formed within the downtrend. After that, a sideways price movement with small-bodied candlesticks starts. A breakout of the formed Flag pattern is a signal of trend continuation.

Notably, patterns do not always form distinctly, so it is advisable to look for confirming signals.

Swing Trading

Trend trading offers two main approaches. The first involves identifying the start of a new trend, entering a trade, and holding it open until the trend reverses, with a trailing stop set at the breakeven. The second approach focuses on entering trades during pullbacks, capitalizing on price corrections, or averaging into a position. This method is referred to as swing trading.

Example.

The trend consists of several short-term pullbacks. The strategy involves the following steps:

• A trade is initiated at the conclusion of each pullback, which is highlighted by blue lines on the chart. When the pullback ends, typically marked by a price bounce off a horizontal support level in an uptrend and a sequence of rising candlesticks, it signals an opportunity to open a long position.
• A trade can be closed at the beginning of the next correction or at the end of the trend.
• A trend can be deemed finished when the ongoing correction falls to the level where the last correction ended. Take, for instance, the correction indicated by the second blue line. Even though the uptrend has continued, it is better to close long trades in this case.

Resistance/support levels, pivot points, and Fibonacci retracement levels are effective tools for pinpointing corrections.

Pivot Point Strategy

A pivot point serves as an additional tool for predicting potential resistance and support levels. The indicator relies solely on mathematical calculations, disregarding market psychology and the current trend’s strength. While its reliability may be uncertain, the indicator is best utilized as a supplementary tool for confirming signals rather than the primary one.

There are several options for calculating pivot points: classic points, Camarilla, Woodie, DeMark, etc. The best option for a specific asset ultimately depends on testing and evaluation.

If the price breaks through the first key level, it may stall at the second or third level. When pivot points align with levels drawn from price extremes, they provide a strong confirmation signal. Pivot points can also be used to set stop orders. For a short trade, the stop order is placed just above the R1 or R2 level, and for a long trade, it is set just below the S1 or S2 level.

Additional Tools for Intraday Strategies

There are several additional tools for intraday trading that can help you analyze the market and spot signals.

• Stock screeners are useful for trading stocks based on fundamental analysis. They are services that provide statistics on each company, enabling you to filter stocks based on many parameters like trading volume, financial indicators (EBITDA, P/E, debt load, etc.), technical indicators, and other metrics. For the US stock market, one of the best screeners is Finviz.

• Horizontal volumes represent the trading activity at specific price levels, regardless of time. They highlight the price ranges where market participants show significant interest. The boundaries of these ranges often serve as key support and resistance levels.

Vertical volumes show the volume of trades for a certain period, such as an hour or a day, and are displayed below the price chart on the time scale. They can tell you when the price breaches the flat’s boundary or when the trend will end. If vertical volumes do not grow during a breakout, the breakout may be false. If the volume diminishes with each new candlestick, a reversal is possible.

The horizontal line is plotted by the vertical volume peaks. Their sharp abnormal increase confirms the strong downward movement.

• The market sentiment reflects the number of trades currently open in either direction. For instance, on the LiteFinance trading platform, this indicator can be found in each asset’s description. The values are derived from aggregated data collected within the broker’s system.

Intraday Trading Rules and Tips

 Basic intraday trading tips for beginners:

• Choose liquid assets to avoid losing money on swaps.
• Adhere to the risk management rules. If you do not have enough experience in risk assessment, set stop orders, as intraday trading is riskier than investing in the regular stock market.
• Opt for assets with high but manageable volatility, and you will get results faster.
• Consider leveraging the positive or negative correlation between assets as a signal for entering long or short trades. This correlation can also serve as a confirmation of other trading signals.
• Stay aware of the news, as it can significantly impact the market landscape.
• A value area is a statistical tool for identifying signals based on the trading volumes from prior periods.

When developing any trading strategy, it is crucial to start with thorough preliminary testing using a testing platform to analyze historical data. Additionally, practical testing on a demo account is essential. Only after achieving consistent and reliable results should you consider opening trades on a live trading account.

Choosing Liquid Assets

Liquidity is the ability of an asset to be quickly bought or sold. The more buyers and sellers there are, the faster the transaction and the smaller the difference between the buying and selling price. Mass media and analytical portals typically provide more information on liquid assets than on exotic ones, resulting in better data for analysis. Consequently, liquid assets often have narrower spreads and less frequent slippages.

Assets with high liquidity:

• Major currency pairs. Their cross rates have slightly less liquidity.
• US stock indices (CFDs, futures). The NASDAQ, S&P 500, and Dow Jones indices.
• High-volatility stocks. Blue chip stocks are most often included in the major stock indices.
• Commodities. Gold, oil (CFDs, futures).
• Cryptocurrencies which are among the top 50 in terms of capitalization.

To control the spread rate online, adding a script to the trading platform is advisable.

Setting a Stop Loss to Reduce Losses

A stop-loss is used to automatically sell the shares if the price moves against the initial forecast. Theoretically, it minimizes potential losses during deep drawdowns. However, in practice, it can close profitable trades during high volatility.

Tips for setting a stop loss:

• The stop-loss size is calculated based on the rule that suggests risking only 1% to 3% of your total deposit on each trade. You need to know the one pip value, which depends on the position volume in lots.

Example: for a EURUSD position of 0.01 lot, each pip will cost you $0.1. With a deposit of $100, the risk level is set at 1% or $1. Thus, an acceptable stop-loss size would be 10 pips.

• Establish clear criteria for setting a stop-loss order. A common pitfall is believing that the price will certainly bounce back soon, leading one to adjust a stop order further away. It is crucial to keep emotions in check and refrain from moving the order.
• In the run-up to the news release, volatility tends to increase significantly, leading to a potential drawdown or a stop order being triggered prematurely. Therefore, it is better to close trades.
• Pay attention to the level of volatility. By analyzing the price history, you can determine the average size of corrections in pips. For example, an average correction within a trend is 10 pips, so the stop-loss or trailing stop size is 15 pips.
• A stop order can be placed above a swing high or a few pips above strong resistance and below the support level. These levels’ breakout can signify a new trend. Therefore, a losing trade should be closed without hesitation. However, it is possible that the price tests the level and continues moving in the initially anticipated direction.

Let’s break down the example below.

• 1 – Opening a short trade after the support level breakout.
• 2 – Resistance level.
• 3 – Potential spot for setting a stop order for a short position (blue line).

The decision to use a stop-loss order ultimately depends on the individual trader. Any beginner trader is strongly recommended to use it. However, professionals often trade without stop orders, provided that they always monitor open trades and their deposit is able to withstand deep drawdowns.

An alternative to a fixed stop-loss order is a trailing stop. If the price moves in the forecasted direction, a trailing stop order follows the price at a specified distance and stops when the price reverses.

Asset Volatility

At first glance, high volatility may seem an advantage. After all, does it really matter if the price moves by 20 pips or 40 pips in four hours? It seems easier and quicker to profit from a highly volatile asset. However, it is not the whole picture. Volatility implies price movement in both directions. In fact, assets with high volatility often experience more frequent fluctuations and larger swings, which can trigger stop orders regularly and lead to significant drawdowns if the stops are set too far.

Intraday trading advice from an experienced trader:

• Do not chase quick profits. Choose assets with low volatility, as they tend to move in a steadier trend with fewer false breakouts.
• Use the ATR indicator to gauge intraday volatility.
• Try to avoid trading ahead of news releases when volatility increases.

Another useful tool is the volatility calculator.

Choosing Assets with Positive or Negative Correlation

Assets react differently and at various speeds to the news. When their price movements align, it indicates a positive correlation. Conversely, if prices move in opposite directions, it is a negative correlation. This feature can be used to analyze price performance and develop trading systems.

Examples:

• Bitcoin serves as the main driving force behind the cryptocurrency market. Whenever positive news boosts BTC, other crypto-assets tend to follow suit with a slight delay.
• Pork and beef futures show a positive correlation. If the price of pork futures climbs, beef futures tend to grow, and vice versa.
• Rising oil prices tend to exert downward pressure on transport companies’ shares, highlighting a clear negative correlation between the two.

A correlation calculator evaluates the strength of different types of asset correlation over different time intervals. Numerous websites offer correlation calculators for major currency pairs and precious metals.

Dependence on News Releases

If you want to profit from the volatility caused by news, choose the most sensitive assets:

• Cryptocurrencies. Cryptocurrencies react best to global news. Influential figures like Elon Musk can significantly boost the price, while decisions made by regulators also play a vital role. Such news can cause coins from the top 50 to move by 10% or even more within a single trading day.
• Stocks. Highly liquid securities may surge by 5%, 7%, or 10% in response to positive financial data and upbeat forecasts. Make sure to stay updated with the financial reports calendar.
• Currency pairs. They react to macro statistics, but the price change is relatively small.
• Commodities. Oil is influenced by OPEC decisions, while gold responds to the situation in the currency markets and the overall state of the economy.

Beginner traders are recommended to stay out of trades during the one-hour period before and after key news events. For all markets, excluding cryptocurrencies, you can find a schedule of these events in the Economic Calendar.

Value Area Trading

This strategy is effective on stock markets, although testing results show that it can be applied to other assets as well. The strategy involves the following aspects:

• The value area represents the price range where at least 70% of the previous candlestick’s trading volume took place.
• The upper and lower boundaries of this range are resistance and support levels, respectively.
• If the next candlestick opens above or below this range, there is an 80% probability that the price will return within the range during the trading session.

For intraday trading, the value area is identified on the D1 time frame. If the price remains below the range for the first hour, consider a long trade. Conversely, if it is above the range, initiate a short one. Keep in mind that this strategy is purely advisory.

Conclusion 

Let’s summarise the key points and basic rules regarding intraday trading strategies.

1. Intraday strategies are suitable for beginners (except for scalping strategies). They have no swap costs, and the M30 to H1 time frames provide opportunities for thoughtful decision-making with a manageable emotional load.

2. Technical tools for intraday trading strategies include anything you understand and feel comfortable using, including trend indicators, oscillators, volume indicators, patterns, trend lines, key levels, etc.

3. Basic intraday trading rules:

• stick to a clearly outlined trading plan that defines trading style, objectives, risk tolerance, and specific trade entry and exit points criteria;
• check any strategy in a tester and on a demo account to achieve consistently positive results;
• use stop-loss orders;
• avoid being greedy. Do not increase the volume of your trade against risk management rules, and do not try to get the most out of the trend. Traders, especially beginners, should prioritize proper risk management for successful intraday trading;
• close trades before the end of the trading session;
• exercise extreme caution during periods of abnormal market volatility, especially around news releases. Reduce position volumes or completely exit the market if you have no experience;
• do not get stuck in FOMO, excessive excitement, or disappointment.

Do not hesitate to embrace risks, train your intuition, and you will achieve success!

Intraday Trading Strategies FAQ

Is intraday trading profitable?

Intraday trading provides a number of advantages: no swap costs, moderate emotional load, no need to constantly monitor the chart, and you can see the results of your trades by the end of each trading day. Unlike scalping, intraday strategies allow you to capture strong trend movements.

What is the easiest intraday trading strategy?

The simplest strategy involves opening a trade when a new trend emerges, for example, at the end of an old trend or when the price breaks through a flat channel. To spot the beginning of a new trend, traders often rely on tools like moving averages, oscillators, resistance and support levels, as well as trend lines.

How to succeed in intraday trading?

You should have several effective strategies tailored to various market conditions. Each strategy should come with a well-defined algorithm for both opening and closing trades, along with a predetermined risk level. These strategies should be tested on a 12 to 24-month time frame, involving at least 300 trades, and checked on a demo account afterward. Besides, some traders struggle to make profits because they often neglect to select the right stocks to trade. Thus, poorly managed day trading can lead to negative outcomes.

Which option strategy is best for intraday trading?

There are two types of strategies for the derivatives market. The first is a straddle, which involves purchasing both a call option and a put option on the same underlying asset, ensuring they share the same strike price and expiration date. The second strategy is known as a strangle, where you buy a call option and a put option that have different strike prices but share the same expiration date.

Which time frame is best for intraday trading?

The M30–H1 time frames are well-suited for intraday trading, as they allow traders to capture trend movements spanning 10–15 candlesticks, taking into account possible corrections. Time frames below M30 are often influenced by short-term speculative movements driven by smart money.

How to predict intraday trading trends?

Use any technical tools, including basic and custom indicators added to the platform, volume and volatility indicators. Moreover, chart and fundamental analysis will allow you to make more informed trading decisions.

Are there restrictions for intraday trading?

The only restriction is trading on the time frame below H4, closing all trades before the end of the trading session. There are no other restrictions. You can analyze price movements on higher time frames, use any indicators and patterns, trade on news, etc.

Which pattern is best for intraday trading?

Any reversal pattern is suitable. Reversal patterns indicate the end of the current trend and the beginning of a new one. Examples: a Pin Bar, a Hammer, a Hanging Man, a Double Bottom, or a Double Top. Alternatively, you can use trend continuation patterns like a Flag or Pennant. However, they help identify only a part of the trend.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.