We will have two options after buying a stock. Either to keep it for the coming decade or to sell it on the same day. Both have its own advantages. But if you decide to close it on the same day, then you should know some trading tips and tricks for Intraday Trading.
Intraday is the process of buying and selling a stock on the same day. You need to have a clear vision of what you are about to do. There are some covert complications which might make you lose your profit. So first, learn how to carry out Intraday trading with some of the steps given below. Here we discuss about some of the the trading tips and tricks for the intraday trading.
TRADING TIPS AND TRICKS FOR INTRADAY TRADING
- It is better to find liquid shares as you will have to close the position at the end of the day. It is advisable to look for large cap shares.
- Construct your portfolio in line with your financial strength and needs.
- Always close your open positions -Many of the intraday traders have a tendency to convert / carry forward the intra positions to delivery – That should be avoided. Sometimes, intraday stocks may have poor fundamentals.
- Position sizing is an important rule in intraday trading. Always set a perfect risk reward ratio for all types of intraday trades.
- Always plan your trades & trade your plans.
- Keep emotions and business separate.
- Always have a trading ledger to track all your trades.
- Even though it’s trading, it’s a better practice to trade on stocks having Liquidity,OBV, EPS etc.
- You should not go against the flow of the market. It is so unpredictable that even the experts fail to explain and understand the market situation over time.
- Timing is crucial : One of the best intraday trading practice is to avoid taking positions during the first hour of (trading) for the day. Because volatility would b high at this hour.
- Before buying a stock, understand how it would behave all over the day. Various indicators could help in predicting the behavior of a particular stock.
- This can be considered as a fast trading, but it requires patience. It can be more inconsistent. Therefore, you need to take control of your ‘profit-earning only’ mentality and know that it is not always obligatory to earn profit.
- Research and analysis on a daily basis is a necessity for Intraday Trading. You have to use the strategies according to the market’s momentum. Update your strategies with the trends rather than using the same one everywhere.
- Never pay attention to any rumors in stock market unless you are certain about it. The best way is to stay with your strategy until you are sure about the news.
- Plan for the present day you have. No need to think about the future. So, plan accordingly.
- Never go running behind earning a lot. Trading has never been a fair thing. Sometimes you gain, sometimes you lose. So, accept what you earned and be satisfied.
- Utilize the Stop Loss, which is a feature that operates selling of a stock automatically, when the price drops down a particular limit.
- Book profit once the target is reached. This is supposed to be one of the main trick but unfortunately many traders fail here.
- Do not Challenge the market , Avoid Overtrading .
- Set a targeted amount to trade for the day. This will help to minimize the loss.
- Know all the technicalities about the shares that you are gonna buy. This includes stock splits, dividends, mergers, bonus dates, etc.
- You should know when to exit. The flow of market is always unpredictable. If it is against your calculation, you should walk out of it.
These are some of the tips and tricks for Intraday Trading. You should know that with a good strategy and implementation, you could achieve a fair success in Intraday Trading.