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Most of Intraday traders work on High leverage / Margin provided by the brokers which might result in to huge loses unless they follow strict money management and should not trap in to more and more trades , the ideal way is to make as much less trades as possible using best trading techniques or strategies.

We would be talking about some techniques or strategies that a novice day trader can learn and use the same for his day trading.

• The best time to invest is when the market is down, however you must remember the fundamentals to avoid risks.
• Avoid chasing a stock and buy when the market is in the grip of panic
• Try to invest only in the fundamentally strong stocks and that are undervalued.
• Try to avoid loss-making companies and look for dividend paying record
• Try to invest a fixed amount every month on the stock

### PIVOT POINT THEORY

This theory would help us to calculate the support and resistance levels for that stock for the next day.

We can calculate the support and resistance levels for that stock for the next day by taking previous day’s trading prices of a stock.

Support and Resistance terms are very simple to understand and self explanatory in nature, a stock which is moving higher may stop at resistance level and come back. Similarly, a stock moving lower, may stop at support level and reverse its move. Stock is expected to move to next support or resistance level after crossing first support or resistance level.

Pivot Point Formula: Pivot Point Theory helps you forecast the intraday stock movement for next trading day. To understand this theory we need to select a stock (Reliance Industries) for Intraday Trading and we need its previous day trading data-

• Intraday high price it touched (H),(Exp High Price : Reliance Industry : 1250)
• Intraday low price it touched (L) , (Low Price : Reliance Industry : 1200)
• The previous day closing price (C) for that stock.(Closing Price: Reliance Industry : 1225)
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Divide the total value by 3 (P) = X/3 (P=3675/3=1225)

Multiply it by 2:- X/3*2=Y(Y=1225*2=2450)

This value P (1225) is called the Pivot Point. Stock continues to trade above Pivot Point is likely to move higher towards first resistance level and above that towards second resistance level. If stock continues to trade below the Pivot Point, it is likely to move lower towards first support level and after that towards second support level.

Let’s calculate resistance and support levels:

First resistance level (R1) = It is the difference between the {Pivot Point X 2} or Y and the Intraday Low price. Second resistance level is nothing but addition of Pivot point with difference between Intraday High & Low Price.

R1= Y-L (2450-1200=1250)

R2=P+ (H-L) (1225+(1250-1200)=1275)

First support level (S1) = it is the difference between Y and the Intraday High price.

S1= Y-H (2450-1250= 1200)

S2= P-(H-L)(1225-(1250-1200)=1175)

### FRACTION THEORY

This theory is also based on previous day price movements of a stock.

Sum up high (H), low (L) and closing (C) price of previous day of the stock and multiply it by 0.67 (ratio of 2:3 as in pivot theory and it is constant)

(H+L+C)* 0.67=Y(Y= (1250+1200+1225)*067= 2462.25))

Resistance (R1) = Y-L(R1=2462.25-1200=1262.25)

Support (S1) = Y-H(S1=2462.25-1250=1212.25)