What Are The Best Ways To Make Consistent Profit In Intraday Trading?

If you wish to generate consistent profit in intraday trading, then you are not alone as lots of people also want to achieve it. There are people are busy because they are making a good amount of money only by intraday trading. Intraday trading is difficult.

Intraday Trading

You need to be calm and patient. From Barber, Lee, Odean (2017) "Do Day Traders Rationally Learn About Their Ability", it claimed that more than 75% of intraday traders quit trading within 2 years. Furthermore, in aggregate, intraday traders lose money overall.

Such traders don’t even taste their first success and probably donated to their loss market.

STOP! Do you really think you can overcome the numbers against? We don't think it is possible.

Nevertheless, some traders don’t lose patience and have made massive profits. So, the choice is yours whether you want to try intraday trading

In this article, you will find out what are the best ways to make a consistent profit in intraday trading from the Internet. 

The Best Ways to Make Consistent Profit in Intraday Trading

You need to master these ways to make a consistent profit in intraday trading. 

  • Pick The Stocks From Midcap List
  • Without any doubt, large-cap stocks are steady and strong. However, if you only want to trade intraday, large caps are not ideal for you as they are too expensive and don't move enough. These caps are ideal for long-term investors.

    Penny stock is possible but they are illiquid usually. This creates lots of overhead and fees wasted in slippage or the spread.

    Logically, you should pick stocks from the midcap list with a high trading volume for the day. Midcap stocks have a better potential for price movement with the demand. Another good thing about these stocks is they move greatly based on the breaking news. If you want to earn consistent profit in intraday trading, pick up the daily chart from the midcap category. 

  • Pick Your Best Stock Without Looking At Others
  • This might be confusing for you as it limits your trade. When you always look for the best stock, then you will get fewer chances to trade in the entire season. So, what is the correct strategy?

    I would recommend paper trading at least 20-30 different stocks to see which one you are profitable or losing at the end of the day over a month. Doing this, you may find out which stock you have an "edge" or more knowledge about. Some traders called this “precision accuracy score.” Your score should be above 90, as only then you would be able to make reasonable profits in intraday trading. 

  • Make A Group Of Intraday Traders 
  • In intraday trading, you need a different mindset and temperament to reduce blind spots. So, a good strategy is to make a group of intraday traders.

    The benefit of the group is you learn by the mistakes of others, and other people learn from you. In this way, everyone can enjoy the benefit of a group. 

    You would be able to accurately anticipate the price movements with the opinion of fellow traders and by looking at the market sentiment. Tracking the stock market’s movement is a challenging task. By following the right tactics, you can predict the movement and minimize the risk. These simple methods can help you to make a consistent profit in intraday trading. 

    How to Select Stocks for Intraday Trading?

    It is the most important step in intraday trading. Follow the simple rules while selecting stocks for intraday traders. 

    Rule 1: Liquidity

    Liquid stocks allow traders to purchase and sold the stock without affecting the price. However, intraday trading majorly relies on precise timing and speed, but large volumes can make in and out of the trade easy. Depth is also critical in intraday trading, and it tells you about the liquidity of the stock. It also tells you about the price levels above or below the bid. 

    Rule 2: Medium to High Volatility

    Price movement is the basic requirement of the intraday traders to make money. Day traders often choose those stocks that produce good results in terms of percentage or dollars. Both of these two filters produce different results. Those stocks are ideal for the intraday trade that has a movement of 3% or more per day. In terms of dollars, the stocks with a movement of $1.50 or more are ideal for trade. 

    Rule 3: Group Correlated Stocks for Opportunities

    Most of the intraday traders look for those equities that have a correlation with their index and sector group and tend to move with intraday stock prices. What is the benefit of this? Read up about Jim Simons and one of his strategies is finding unusual opportunities in a group of stocks.

    When the group or sector ticks upward, the price of an individual stock should also increase. It becomes more important when the traders want to trade at the strongest or weakest stock each day. If the trader is interested in trading on the same stock every day, then there is no need to worry about whether it correlates with anything else or not. 

    Guidelines for Entry and Exit Strategies

    After picking the best stock in the world, the profit ratio will depend on which strategy you choose for trading. As the intraday traders are unlimited, so does intraday strategies. So, follow the basic guidelines to succeed in intraday trading. 

  • Trade only with the current intraday trend
  • Stock markets always tend to move in waves, so it depends on traders how they ride the waves? When the market is in an uptrend, try to take long positions. During a downtrend, it would be ideal to focus on short positions. Intraday trading doesn’t generally happen in the same trend, but one or two trades can be made before the trend’s reversal. When the trend is changed, start trading with the new trend. 

  • Trade strong stocks in an uptrend and weak stocks in a downtrend
  • We have talked about the best stocks earlier. Trading strong stocks in an uptrend can bring you lots of profit. When you do this consistently, you can generate a consistent profit. 

  • Be patient and wait for the pullback
  • While trading in the stock market, patience is the key. Trend lines can give you the indication for price waves. While selecting stocks for intraday trading, a trend line can play a significant rule. So whatever the situation is, be patient and wait for the pullback. 

    There are lots of more strategies that can play their part in making a consistent profit in intraday trading. So, these are the ways that can help to make consistent profit in intraday trading.

    Sky Hoon. Read Full Bio
    Website Owner, Twitter-er
    He has been trading since 2008. He started this blog to share the journey about option trading. He dabbled in stocks, bitcoin, ethereum (in Celsius Network), ETF (lazy Dollar Cost Averaging) and also built websites for fun. He used this as a platform to share my experiences and mistakes in trading, especially options which I just picked up.