Every trader has one aim when he or she begins trading in the share market. And that is, making a profit. Some traders choose to put their money in the equity market with the intention of investing it for the long term. While there are a few traders who prefer to earn a quick profit. For such traders, there is intraday trading. As the name suggests, intraday trading is the kind of trading where shares are bought and sold within the same trading day. In this case, shares are purchased not with the intention to invest but in order to earn profit in a short span of time by keeping an eye on the stock market movement.
You can perform intraday trading only if you have an active trading account in your name. Intraday trading looks very appealing to an outsider, but the possibility of facing losses is also high in this case. Hence, following a set of rules always helps. Every trader loves to earn money and the rule that matters while day trading is, MAKE PROFIT! If you think about it, there are no hard and fast rules when it comes to intraday trading, but following a few norms will help you gain maximum profit with minimum risks. So here is a list of intraday trading rules to help you generate money.
- Trade only in the best day trading stocks
This is one of the most important rules for intraday traders. Choosing the right kind of stock is paramount to make sure you earn a good profit. And profit comes from trading only the best day trading stocks. There are a few criteria that a stock needs to fall into to be perfect for trading. Namely, stocks with high liquidity, high volatility, sector specific stocks, stocks that match your strategy. Once you identify them, you can begin your trade.
- Enter, Exit and Escape
This is a good rule to follow for amateur traders. Entry price is the amount where you are willing to enter the trade. Exit price is the share price at which you are willing to exit the trade profitably. And escape price is the share price that is the worst-case scenario where exit the trade without making a considerable loss.
- Trading with money you can afford to lose
This is an excellent tip to avoid significant losses. It is possible to lose money within a few minutes of the wrong trade. Which is why it is advised that you trade with only the money you can afford to lose. Never trade all your money in a single trade. Always keep some aside in case of emergencies.
- Get started with research and analysis
A trader must always be aware of the price of the stocks, their support and resistance level, ranges, quarterly and annual reports of the organization and so on. Good research and analysis of facts at hand go a long way. Keep learning from your past trades and build newer strategies and try applying them to your next trade. You will grow as a trader only if you are willing to learn and adapt to the scenarios around you.
- Keep your emotions at bay
Human beings are instinctively emotional. But that is one trait that is harmful to an intraday trader. Intraday trading is a volatile market where things change in the blink of an eye. An intraday trader must keep his emotions at bay and try not to be affected by either profits or losses. Patience is a great virtue for intraday trader. The trader must be confident about his own strategies and not afraid to take bold decisions.
These are some basic rules of intraday trading that you should follow to be able to succeed in the market. And if you still have some doubts, get in touch with an expert to know more.