Role of timing in intraday trading

Role of timing in intraday trading
Highlights

On an average, an intraday trader has only few hours to work in the market.

On an average, an intraday trader has only few hours to work in the market. These five to six hours' time period is very crucial for a trader.

Within this period, he must take a decision of stock selection, needs to buy the stock and sell the stock on the same day. For experts in intraday trading, this would be like a cakewalk. But for beginners, it is a herculean task.

Time also has a key role to play in intraday trading. After selection of the stock, the time of entry and exit also have an important role. Profits during intraday depend heavily on the time factor.

During the span of six hours itself, one needs to observe on the trending changes. Let us try to understand how to choose time for intraday trading.

When the market opens in the morning, the first half an hour is highly volatile and there is a heavy rush and noise in the market. This time in the morning is beneficial for experts.

For those who do not have experience, it is better to be away from the market during this hour. During the first half an hour, there is a lot of trading activity by BTST traders because of which there is huge price fluctuation.

In the first one hour, the average traded price or ATP tries to settle down which then enables us to decide on the price at which we need to buy or sell the stock.

Between 9:15 to 9:45 if the price of a stock falls then it will increase after 10:15 or so and vice versa. Between 9:45 to 10:30, one can start noticing trends. During this time, try to analyse the price movement in relation to ATP.

The next important time frame window would be between 1:15 to 1:45. Major changes in the market can be observed after 1:30. If no trend is noticed here, do not exit from the market.

These changes should be noted and should not be taken in a light manner. If a stock which is bought in the morning around 10 o'clock shows a negative trend around 1:30, then exit from the stock.

The last one hour of the market is another important hour. Even during this last one hour, there is a lot of volatility. After 2:30 observe for a trend which could be upside or downside, and this will be very significant.

Major trend changes occur during this period. For experts again, this is a very favorable time period to invest and exit during this one hour itself.

A trend which is noticed after 3 o'clock whether it is upside or downside, it should be studied carefully. Any stock trending at this time will fetch half a per cent or 7 per cent soon.

If we identify the time zones correctly and practice trading during this time period, then the accuracy rate would be high.

(The author is a homemaker who dabbles in stock market investments in free time)

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