How To Profit In Intraday Trading is the third post in the series of “Intraday Trading Entry and Exit Set Up“. In this post, I will explain examples for how to decide important price level on the intraday chart and at the same time how to trade these levels. The step by step method for complete trading with the example is as follows:
Marking Important Intraday Levels
The very first step is to mark important level on a 15-min chart of last 2-3 months. These level are strong levels of price swings and these levels are even useful for swing traders.
The second step is to mark levels on 5-min chart around current price levels. These levels are useful as immediate intraday trading levels for next 2-3 days. How to trade this important support and resistance level in an intraday market? Remember, levels itself doesn’t tell anything about the next market move. But we rely on the potential characteristic of price to swing between this levels. So we expect the stock, not in the strong trend. This is true in intraday. Most of the time price swings up and down without clear direction.
Deciding Trade Entry
In the third step, we watch for levels which are being respected by current price move. This step is very important and crucial for our success in this method. This is exactly opposite of breakout trading where we look for breakouts. We use the signals of price and volume to judge the reversal. As a rule of thumb remember that volume rises in the direction of the move. So with this logic, we sense the change of direction of the current price move.
When the price respect a level of support, we enter a long trade. And with the opposite logic, we enter into a short trade when price respects a level of resistance. Try to keep the entry price as favorable as possible. Do not hurry in entering the trade. Always try to get the best price while entering the trade. This will not only reduce your risk but also increase your profit potential. Best entry price also keeps you out of the “Shakeout Traps”.
Deciding Exit Point:
We book our profit if it is reasonable compared to the risk means at least twice the risk. Profit booking also depends upon the price move. Remember we don’t expect a breakout of this level. So after entering the trade, we exit the trade as soon as we feel that this level will be broken. We keep our stoploss few points above the resistance level and few points below support level depending on our risk/reward. This stoplosses are strictly mental stoploss, So we do not enter them the n system. Because in intraday stoploss order placed in the system are often eaten away by “False Move”.
For example of “How To Profit In Intraday” using this method watch the complete video tutorial.
If you are new to this series you can watch first two part of this series first from the link given in the description below: