Many investors use short-term trading to achieve a consistent income from stock trading. Given the daily market volatility, intraday trading involves significant risk, whereas long-term trading is more suitable for capital growth than generating revenue. Investors research the market before investing to select the best trades and close off transactions quickly. Since the investor typically concentrates on short price fluctuations, the profit is often small.
Therefore, for an investor to make a good profit, there must be several profitable trades. But how can you achieve profitable trades and stable earnings from online share trading? Continue reading as we discuss a few trading strategies to help you earn a steady profit while trading online.
- Gap and Go Strategy: Equities might open with a gap from the previous day when there is no pre-market volume. The gap is referred to as the gap up if it opens higher than the previous day and the gap down if it opens lower than the last day. Such circumstances arise because of certain news that the media triggers.
These stocks are sought after by intraday traders who bet on them, hoping that the gaps will close by the time trading ends. This strategy is ideal for investors looking for a quick income with little risk.
- Momentum Strategy: Stock trading demands investing in the proper direction and at the perfect moment, which is what the momentum trading strategy is all about. The role of an intraday trader is to research relevant news before the market opens for investing and trade accordingly on their online trading platform, such as ICICIdirect. Information about the stocks that move the graph either upward or downward helps investors chooses stocks.
Although, how long an investor holds shares depends entirely on studying these market trends, which they must monitor daily to ensure that the appropriate decision is made at the right time.
- Breakout Strategy: Timing is critical in a breakout trading technique in trading. Investors do just that in breakout strategy, they recognise the threshold points at which stock prices increase or fall below the set time. If the trend continues to push prices above the mark, investors will contemplate long positions and buy the stock.
If prices drop below the cut-off mark, the investor may consider taking on short positions or selling the shares. The breakout trading technique is based on the fundamental idea that prices will become more volatile and continue the trend if they cross the threshold marks.It is critical to conduct market research and stick to a specific plan to earn a steady profit. Begin by making small trades on your Demat account to put what you’ve learned into practice. If you review and adjust your share trading technique, you can generate a steady income over time.