Intraday Trading is different from long-term stock investment. Day trading involves trading a stock for a one-day only.
Intraday trading involves purchasing and selling of stocks within the same trading day. Here stocks are bought for the purpose of earning profits by harnessing the movement of stocks and securities. Thus, the swings in the prices of the stocks are harnessed to earn a better return from the trading of stocks. Day Trading is different from long-term stock investment. Day trading involves trading a stock for a one-day only. It is risky as compared to the stock investment.
The most important points to be remembered in Intraday Trading are following -
1. Patience
The day traders have to keep patience until the right time. Just wait for the right market conditions before start trading. There are times when it is better to stay out of the Market and just observe from the sidelines what is actually happen. It will prepare you for future risk.
2. Identify strong stock trend
This is the most complex task in the stock market. One mistake in judgement the market means big losses. Also, keep a point in mind that in the highly volatile market, each trend is for short term, it makes the stock selection job more difficult for a trader. Sometimes, the stocks that an investor identified for short selling rise on the day of trade. Therefore, it is very important to identify a strong trend in the stock to make a good income. For better results, a trader should refer stock tips, intraday tips or more to get better guidance related to trading.
3. Initiate early morning trade
It is observed that initial 20-25 mins of the morning were highly volatile trade. Generally, traders get suggestions to trade after 30 mins of early trade. Most of the stocks trend is established within 30 mins of the day. In stocks with a high trend, a profitable position can be taken within few mins and a trader can make more profit in such stocks.
4. Detachment
A trader should focus on the technical part rather than on the money only. If your trades are technically correct, the profits will surely achieve. Just remain emotionally detached from the market. Avoid taking any decision in the short-term excitement. If the trader is continually checking prices of stocks or market charts. It is a sign that you are a little more unsure about your trading strategy. So don't be too emotional, just keep calm while trading.
5. Limit the loss
Always use stop-losses to protect your money. When the stop-loss is activated, take a decision immediately. The biggest mistake that most of the traders make is to hold a position that is falling, hoping for a regaining. Remember that falling stocks have a habit of declining below a point that you expected from that stock. So always limit your loss to protect your money.
It is human nature, I don't know why but most traders and investors ignore these key rules when they start trading. The main factor in intraday trading is to control your emotions and avoid running along with the crowd. Take suggestions from financial market experts by taking their trading tips just like commodity, forex or binary option trading tips in order to avoid trading mistakes.
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