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Ria Jain made post

As an intraday trader should I rely more on technical charts or on consistent news flows?

Answer
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Anjana Aiyar answered.
2 years ago


As an intraday trader, you need to rely heavily on technical charts. Yes, you need to do all the charting yourself and not to rely on others for advice. Your intraday trading strategy reflects your personality and hence you must stick to your knitting. Of course, you must develop the capacity to read charts on your own. But, above all, ensure that the stock depicts clear chart patterns. If a stock does not give clear chart patterns then what do you trade on really? So, technical charts matter; but more important is how well the charts reflect a true picture of the underlying trend. There is one more thing to remember when it comes to reading charts. It is not possible to trade in a stock that does not have sufficient history or which does not depict a clear pattern. Only with a long history, you can decipher patterns and then trade for a repeat of these patterns.
Let us look at news flows. What matters actually is the price sensitivity to news flows. An intraday trader, typically, relies on two factors to trade viz. chart patterns and sensitivity to news flows. You cannot trade intraday in a stock that does not react to the news. Basically, you look at stocks that are extremely sensitive to news. That is when your strategy of buying on expectations and selling on announcements can actually work in practice. Intraday trading is as much about getting the stock list right as it is about discipline. The key here is to keep your stock universe limited so that you can do justice tracking on these stocks in terms of fundamentals, technicals and news flows.