Intraday Trading Practical Guide: 6 Core

Intraday Trading Practical Guide: 6 Core Strategies to Help You Seize Short-Term Market Opportunities

 

For traders seeking short-term profits and unwilling to bear overnight risks, intraday trading is an extremely attractive option. It requires traders to open and close positions on the same day, with the core lying in accurately capturing intraday price fluctuations. Choosing the right strategy is the key to success.

 

The trend trading strategy is one of the most basic and classic approaches in intraday trading, with its core logic being "following the trend". The first thing a trader needs to do is identify the overall direction of the current market—whether it is a clear uptrend, downtrend, or a consolidating sideways trend. This step usually involves using technical tools such as trend lines, moving averages, or the Relative Strength Index (RSI) for assistance. For example, when the price continuously trades above the 50-day moving average and does not break below this average during each pullback, it can be determined as a short-term uptrend, and the focus should be on buying on dips. If the price hovers below the moving average, the preference shifts to selling on rallies to maximize profit potential by following the trend direction.

 

Unlike trend trading, which pursues "large fluctuations", the scalping strategy is more like a refined operation of "accumulating small gains into large ones". The holding time for this strategy is often only a few minutes, or even tens of seconds, with the goal of capturing tiny price differences in the market. Traders need to keep a close eye on the trading screen at all times and quickly identify trading opportunities in high-liquidity assets (such as major currency pairs and large-cap blue-chip stocks). Once a position is opened, they close it immediately upon seeing a small profit or incurring a slight loss. It does not rely on long-term trends but instead accumulates substantial daily returns through frequent small profits, making it suitable for active traders with high concentration and quick reaction speeds.

 

When the market is stuck in a sideways consolidation with no clear trend, the range trading strategy comes into play. The key to this strategy is to accurately identify the "ceiling" and "floor" of price fluctuations—namely, clear resistance and support levels. Indicators like Bollinger Bands are commonly used to determine the boundaries of the range. The operating logic is straightforward: when the price falls to the lower edge of the range and shows signs of stabilization, traders can enter a long position; when the price rises to the upper edge of the range and retreats due to resistance, they should sell decisively. However, it is crucial to note that once the price breaks through the range boundaries, it signals the end of the consolidation phase. At this point, traders must adjust their strategies promptly to avoid losses from counter-trend operations.

 

The news trading strategy profits from short-term price volatility triggered by the release of major news, testing a trader's sensitivity to information and quick reaction capabilities. Before trading, traders need to sort out the schedule of important economic events and data releases in advance, such as non-farm payroll data, central bank interest rate decisions, and key corporate earnings reports—information that often has a direct impact on the market. For instance, if non-farm payroll data significantly exceeds market expectations, it usually boosts the U.S. dollar exchange rate, allowing traders to quickly buy U.S. dollar-related currency pairs. Conversely, if the data falls short of expectations, it may trigger a U.S. dollar decline, leading to a decision to sell. However, traders must be wary of sudden changes in market liquidity at the moment of news release, which can easily lead to slippage risks, placing higher demands on their order execution speed and risk control capabilities.

 

The moving average crossover strategy determines trading entry and exit points based on crossover signals of moving averages with different timeframes, making it one of the more reliable strategies in technical analysis. A common combination is pairing a short-term moving average with a medium-term moving average, such as the 5-day Exponential Moving Average (EMA5) and the 20-day Exponential Moving Average (EMA20). When the short-term EMA5 crosses above the long-term EMA20, forming a "golden cross", and is accompanied by an expansion of red bars in the MACD indicator, this usually signals a strengthening of bullish momentum. If the price can break through the previous high at this point, traders can enter a long position. Conversely, when the EMA5 crosses below the EMA20, forming a "death cross", and the MACD green bars continue to expand while the price breaks below a key support level, it presents a good opportunity to go short. Stop-loss orders are generally set a certain number of pips outside recent lows or highs, and take-profit levels can be determined based on a preset risk-reward ratio (e.g., 1:2) or when the price breaks below the moving average again, ensuring profits are locked in.

 

The Fibonacci Four-Price Strategy is a trading method based on key price levels, with reference to four core prices: the previous day's high, the previous day's low, the previous day's closing price, and the current day's opening price. The strategy sets the previous day's high as the upper track and the previous day's low as the lower track. When the current day's price breaks above the upper track, it indicates strong bullish momentum in the market, and traders can open a long position. When the price breaks below the lower track, it suggests that bears have gained the upper hand, making it suitable to open a short position. To strictly adhere to the intraday trading principle of "no overnight positions", this strategy usually requires closing all positions before the market closes on the same day, regardless of profit or loss, to avoid uncertainties associated with holding positions overnight. This clear set of entry and exit rules also makes it a popular choice for many novice traders.

 

Regardless of which intraday trading strategy is chosen, it is necessary to align it with one's own risk tolerance, time and energy availability, and understanding of the market. There is no absolutely perfect strategy—only one that suits oneself. Continuous review and summary, along with strict discipline in execution, are the core secrets to long-term survival in the intraday trading market.